Robinhood (HOOD) Shares Dive As Investors React To Fed Uncertainty

Robinhood Markets Inc (NASDAQ:HOOD) shares are trading lower Thursday afternoon, pulling back with the broader market even as fundamentals and earnings remain strong. Here’s what investors need to know.

• HOOD stock is struggling to find support. See if it is worth your attention here.

What To Know: The brokerage recently reported strong third-quarter results, with revenue doubling year over year to $1.27 billion and topping Wall Street expectations. Transaction-based revenue jumped 129%, led by more than 300% growth in cryptocurrency trading, while options and equities revenue climbed sharply.

Earnings of 61 cents per share also beat consensus, and the company logged a record $20 billion in net deposits, higher average revenue per user and growing Gold subscriptions.

Management has been leaning into new businesses to diversify beyond core trading. Prediction markets and Robinhood Crypto each are pacing toward or above $100 million in annualized revenue, while executives tout traction in European tokenized 24/7 trading built on blockchain technology.

The firm is also testing unconventional banking offerings, including a partnership with delivery service Gopuff to bring cash withdrawals directly to customers' homes.

Despite upbeat analyst commentary and a series of price-target hikes following the third quarter, Thursday's risk-off tone, amid worries over interest rates and U.S. growth, saw investors taking profits in the stock after its recent rally.

Why This Matters: Fed uncertainty can weigh on Robinhood because higher-for-longer interest rates typically suppress retail trading activity, its largest revenue driver, by reducing investors' appetite for speculative assets like options and crypto, two segments that generate the majority of the company's transaction-based income.

In addition, prolonged rate volatility can delay the expansion of newer businesses such as Robinhood Banking and prediction markets, both of which rely on steady user cash flows and improving consumer confidence to scale efficiently.

Benzinga Edge Rankings: Benzinga Edge data shows Robinhood with exceptionally strong Momentum (97.93) and Growth (93.76) scores, even as its short-term price trend remains weak.

HOOD Price Action: Robinhood Markets shares closed Thursday down 8.61% at $121.53 at the time of publication on Thursday, according to Benzinga Pro data.

Read Also: EXCLUSIVE: Brokerages Using AI To Help Customers – ‘At The Forefront Of Where We’re Heading’

How To Buy HOOD Stock

By now, you're likely curious about how to participate in the market for Robinhood Markets — be it to purchase shares or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.

In the case of Robinhood Markets, which is trading at $121.29 at some point on Thursday, $100 would buy you 0.82 shares of stock.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option or sell a call option at a strike price above where shares are currently trading — either way, it allows you to profit from the share price decline.

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