By Noor Zainab Hussain and Medha Singh
(Reuters) -Shares of Robinhood Markets Inc reversed course to trade nearly 6% higher on Friday, driven by a broader market rebound, after touching their lowest level since the stock’s IPO in July earlier in the day.
Stellar results from Apple and Visa helped the U.S. stock indexes rise on the last day of a week marked by wild swings amid worries about aggressive rate hikes by the Federal Reserve and geopolitical tensions between Russia and the West. [.N]
“Across the board, we are seeing a pretty big reversion from some of these stocks that have really been crushed,” Gregory Taylor, portfolio manager at Purpose Investments, said.
Commission-free brokerage Robinhood saw its stock fall over 14% earlier, after it posted a quarterly loss on Thursday evening.
The company reported a net loss of $423 million for the three months ended December compared with a profit a year earlier, and its costs more than doubled.
Like many tech start-ups, Robinhood has yet to turn a profit following its IPO. Its monthly active users declined 8% from the sequentially previous quarter as retail investors pulled back from the market.
“Robinhood was one of the pandemic darlings. Almost exactly a year ago, it sat at the center of the meme stock mania. And that has clearly cooled off as we headed into a new year,” Art Hogan, chief market strategist at National Securities in New York, said.
The stock was trading at $12.26 in afternoon trade on Friday. The share price at its IPO in July last year was $38 and it had hit a record high of $85 in August.
Short-interest in Robinhood was $501 million, or 10.77% of float, with about $127 million worth of shares shorted over the last 30 days alone, according to Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.
(Reporting by Noor Zainab Hussain, Medha Singh and Anisha Sircar in Bengaluru; Editing by Shounak Dasgupta and Krishna Chandra Eluri)