Robinhood's Investor Alphabet Sells Off Final Stake In Trading App

Alphabet Inc GOOG GOOGL, the parent company of Google, said on Monday it had sold all of its remaining shares in Robinhood Markets Inc HOOD, the online trading app operator.

The tech giant said it had dissolved its stake in Robinhood Markets, according to a report by Reuters. Although Alphabet’s remaining holding amounted to little more than 600,000 – worth around $5M – the divestment followed a major sale in August when it unloaded 90% of its shares in HOOD.

Robinhood shares were trading 0.8% lower to $8.23 during early trading on Monday, but are down 38% since Alphabet’s August divestment.

Prior to the August sale, Alphabet’s holding in HOOD was worth around $65M – not a huge sum in terms of GOOG’s net worth – but indicative of the excitement that HOOD’s story generated after its August 2021 $38-a-share initial public offering.

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The trading app, founded in 2013, had seen rapid growth as record levels of private investors took to the markets during the COVID-19 pandemic, hitting 22.5 million users and $100 billion in assets under custody, in the second quarter of 2021.

This was partially driven by the popularity of so-called ‘meme’ stocks – many of which were being shorted by hedge funds, then purchased by hundreds of thousands of retail investors, stoked by high-profile social media campaigns.

The eurphoria didn’t last, however, and – following a large price pop at its IPO, going as high as $85 – the shares began to decline as traders became more wary against a backdrop of rising inflation and interest rates.

In its last quarterly financial report, published last week, HOOD reported a 13% year-on-year decline in third-quarter transaction revenue, while active monthly users fell by 16% to 10.3 million – contributing to a net quarterly loss of $85 million.

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