Robinhood Markets Inc (HOOD)

Robinhood (HOOD) stock plummeted by 5.33% following the trading platform's announcement that it has paused its plan to lend to UK-based customers for leveraged trades. This decision is pending further discussions with regulators as Robinhood launches its UK business.

• Margin Investing and Regulatory Concerns: Robinhood had planned to offer margin investing, a form of trading where customers borrow money to make larger trades. The company's UK website initially indicated that it would charge 12% interest on these loans and cited a regulatory exemption that allowed them to offer the product without assessing if it was appropriate for customers. However, the page about margin investing became unavailable in the UK by Monday evening.
• Regulatory Discussions and Uncertainty: A spokesperson for Robinhood stated that margin investing is paused as the company continues discussions with regulators, without specifying the regulator or providing further details. The UK's Financial Conduct Authority, which oversees the UK financial services industry, declined to comment on the exemption or its status for Robinhood.
• Robinhood's UK Business Model: The UK arm of Robinhood will allow customers to buy U.S. stocks but not stocks of companies listed elsewhere. It will not charge commission fees or FX fees on trades and will offer 5% interest rates on customers' uninvested cash. Robinhood's UK CEO Jordan Sinclair declined to comment on when the UK arm is expected to become profitable or its top sources of revenue, but mentioned that it could include a subscription product and income from interest on cash.

Shares of Robinhood Markets (HOOD) dropped by 14.29% from $9.76 to $8.37 in the trading on Wednesday, Novemeber 8, 2023. The reason why HOOD down is due to the company's disappointing quarterly results. Robinhood's Q3 2023 earnings report, released after market close, fell short of expectations. While Wall Street had anticipated $478 million in revenue for the quarter, Robinhood reported $467 million. Additionally, the company incurred a loss of $0.09 per share, slightly better than the expected loss of $0.10.

After the conclusion of the pandemic outbreak, Robinhood's performance was lackluster, as indicated by its May 10 report of sustaining an eighth consecutive quarterly loss.

https://www.tipranks.com/news/robinhood-nasdaqhood-to-enable-overnight-trading