Robinhood (HOOD) shares fell sharply on the back of the company’s third-quarter results that posted lower-than-expected crypto trading revenue.
The popular retailer published its third-quarter report on October 26, where the cryptocurrency was valued at $51 million (19%) out of total transaction-based revenue of $267 million in the quarter.
Tuesday’s release of the report coincided with HOOD dropping about 10% to $35.70, however the price has since risen 1.9% to remain at $36.40 at the time of writing.
The $51 million generated in crypto transactions in the third quarter posted a 78% drop compared to the company’s record high of $233 million in the second quarter. Robinhood’s crypto revenue in the last quarter was boosted by the Dogecoin (DOGE) community, with memecoin accounting for 62% of cryptocurrency revenue.
The company reported total net revenue of $365 million for the quarter, which was significantly lower than Wall Street analysts’ expectations of $437.1 million according to FactSet.
– Mr. Whale (@CryptoWhale) October 26, 2021
Robinhood said in its third quarter report that its business has been affected by several factors including seasonality, market volatility, retail trading behavior and unexpected market events. The company said the same problems may persist in the fourth quarter.
“In the absence of any changes in the market environment or external events, we believe this could result in quarterly revenue of no more than $325 million and full-year revenue of less than $1.8 billion,” the report reads.
While crypto activity has declined, Robinhood CEO Vlad Tenev made clear his optimism about the company’s long-term prospects in digital assets, as he emphasized new products and services designed for retail traders in the third quarter, such as a digital wallet that will finally enable users to withdraw and deposit cryptocurrencies from And to the platform:
“More than one million people have joined the crypto wallet waiting list so far. With live 24/7 phone support, we believe Robinhood has become the most reliable and intuitive platform for retail and crypto investors.”
“Looking forward, we are committed to offering tax-advantaged retirement accounts to help everyone invest in the long-term,” he added.
Related: Robinhood Crypto Wallet Waiting List Reaches 1 Million
In broader terms than cryptocurrency, in Robinhood’s third-quarter report, the company’s net revenue of $365 million posted a 35% drop from the previous quarter. While the company reported a net loss of $1.32 billion, or $2.06 per diluted share, compared to a loss of $502 million, or $2.16 per share, in the second quarter.
The number of monthly active users also decreased from 21.3 million in the second quarter to 18.9 million in the fourth quarter. However, Robinhood’s user base could be set to increase in the fourth quarter, with speculation swirling around the Shiba Inu (SHIB) community that the dog-themed token may be listed on the platform soon.
However, there is no evidence to confirm this. Robinhood sent out a survey on October 23 to its clients regarding the crypto assets they have purchased over the past three months, with SHIB on the list.
BREAKING NEWS: Robinhood is emailing this survey to identify users of their platform.
They are including #SHIB As one of the answers to choose!
Conduct market research clearly about what consumers want. pic.twitter.com/ovBNV2p0Wl
– Shiba Inu News (@ShibalnuNews) October 22 2021
According to data from CoinGecko, SHIB is up about 69% over the past 7 days to $0.00004,759 at the time of writing, while the asset is up 568% over the last 30 days.