Robinhood shares plunged late Thursday, falling below $10 after the company reported disappointing results and a revenue outlook that well below what Wall Street was expecting.
Robinhood’s stock, which shed more than 6% in regular trading, fell another 14% in late trades to around $9.95.
The trading app reported a fourth-quarter loss of 49 cents a share, bigger than Wall Street’s estimate for 45 cents a share. The company posted revenue of $363 million, which topped expectations. But it also revealed that its monthly active users had fallen to 17.3 million in the fourth quarter from 18.9 million in the third quarter.
Robinhood’s revenue outlook for the current quarter was "less than $340 million," more than $100 million short of Wall Street’s target of $448.2 million. The projection was roughly 35% lower than revenue for the year-ago quarter when Robinhood got a lift from the GameStop trading frenzy which the company said featured “heightened trading activity, particularly relating to certain meme stocks.”
The company has also experienced volatility in its crypto trading business, which has grown quickly but made revenue harder to forecast. Falling crypto prices like the market has seen recently tend to depress trading, which could weigh on Robinhood's business.
Robinhood got some good news on Thursday when a U.S. federal court in Florida dismissed a lawsuit accusing the company of violating state laws when it restricted trades on meme stocks in January 2021. Chief Judge Cecilia Altonaga said the negligence and breach of fiduciary duty claims of the plaintiff were not valid due to a customer agreement which allowed Robinhood to restrict trading.