The price of Robinhood shares soars by +10% in pre-market

Today, the price of Robinhood stocks on the stock market is showing a sensational +10% increase in pre-market trading, that is, when markets are still closed. 

The reason is the usage results of their platform in February, which were disclosed last night after the markets closed. 

The results of Robinhood 

Yesterday, the official report of the platform regarding the operating data of February 2024 was published.

These data have proven to be not only very positive, but also significantly higher than expected. 

The number of customers has risen to 23.6 million, with an increase of about 130,000 compared to the previous month.

Assets under custody (AUC) have risen to $118.7 billion, which is 16% more than in January, thanks to $3.6 billion in net deposits in the month of February alone.

The annualized growth rate of AUC was 42%, in fact in the last twelve months net deposits were 21.6 billion dollars, which is 29% more than in February of last year.

What surprised the most, however, was the increase in trading volumes. 

The volumes of notional equity trades have increased by 36% in just one month, in addition to a +12% in options, and a +10% in cryptocurrencies.

The total revenues, coming from loans, amounted to 13 million dollars, 8% more than in January.

Interestingly, cryptocurrency trading volumes have increased less compared to stocks, but the absolute values recorded make it clear that crypto markets are still only a small part of the services offered by the platform. 

In total, in February cryptocurrencies were exchanged on Robinhood for only 6.5 billion dollars, compared to the 81 billion in the stock market and even the 120 billion in the options market. It is enough to say that Binance, for example, declares 41 billion dollars of daily spot trades only in the crypto market. 

The boom in the stock market of Robinhood shares $HOOD

Yesterday at the close of the session, the HOOD stock on the Nasdaq was trading at $17.1. Now in pre-market it has jumped to $19.1, with a gain of about 10%.

Such a high value has not been seen since the end of 2021, which was the peak of success for the crypto markets. 

Actually, the price of HOOD shares on the stock market also reached a peak of $85 in August 2021, just a few days after its market debut. 

The initial price was $38, but since it debuted on the stock market during a speculative bubble, it was a greatly inflated price. In fact, by November of the same year, just as many cryptocurrencies were hitting new all-time highs, the price of Robinhood’s shares fell below the initial value from a few months earlier. 

At the end, 2021 closed at $17.7, a value still higher than yesterday’s closing, but lower than the peak reached today in pre-market. 

During the bear-market of 2022, the price had even dropped below $7, with an incredible -92% from the highs in less than a year. 

Still in November of last year, during a crypto bull-run that had already started, it was around $8, but starting from the end of the month it began a rise that is still ongoing. 

Excluding the crazy prices of the initial listing, it can be said that the price of HOOD shares has now recovered everything it had lost during the 2022 bear market. 

Bernstein’s forecast

Bernstein recently initiated coverage of HOOD shares, with an outperform rating and a price target of $30.

He justified this optimistic forecast by stating that there is a “monstrous” cycle of crypto markets underway that could have very positive repercussions on Robinhood as well.

The broker indeed predicts that the total capitalization of the crypto market could grow by almost three times, reaching $7.5 trillion by 2025, compared to the current $2.6 trillion. 

Bitcoin (BTC) could reach up to 3,000 billion, while Ethereum (ETH) up to 1,800 billion.

The reason would be institutional adoption, that is purchases by large institutional investors. 

This would translate to a price of BTC of about $150,000, and of ETH to about $15,000.