Alphabet Inc., Google‘s parent company, has completely sold off its holdings in Robinhood Markets, according to a Nov. 9 13F-HR filing.
The company reported that it had 0 Class A shares in Robinhood (US:HOOD) as of Sep. 30, 2023, down from 612,214 shares in its previous filing on Aug. 4.
Robinhood, known for its commission-free trades and user-friendly interface, had previously received a significant early investment from Alphabet. However, Alphabet’s decision to cut ties with Robinhood is the result of ongoing reductions in its stake — it had already made a drastic, nearly 90% cut in previous months.
According to Reuters, Robinhood’s market appeal began to decline due to the Federal Reserve’s rate hikes last year, leading to unfavorable economic conditions. This, along with a slowdown in trading, resulted in the app falling short of Wall Street’s revenue estimates in its third-quarter earnings report. As a result, Robinhood’s customer base appeared less active.
Despite uncertain revenues, Robinhood has been moving forward with its strategic growth plans. It recently announced plans to introduce cryptocurrency trading in the European Union following regulatory approval. This EU crypto launch is part of the company’s broader growth strategy and is set to follow the imminent launch of brokerage services in the UK.
However, all of these ambitious expansion plans come with challenges. The trading app’s cryptocurrency transaction revenue fell 55% year-on-year to $23 million in Q3 2023. Yet, despite this drop, Robinhood remains determined to offer crypto products internationally to expand its customer base.
Furthermore, Robinhood’s involvement in the cryptocurrency market is significant. According to an Aug. 30 report by Arkham Intelligence, Robinhood held the fifth-largest account on the Ethereum blockchain and the third-largest Bitcoin address, which holds over $4.3 billion in Bitcoin.
The company has also successfully repurchased its own shares that had been bought by Sam Bankman-Fried. On Sep. 1, 2023, Robinhood reached a deal with the U.S. Marshal Service to repurchase shares seized from Bankman-Fried’s Emergent Fidelity Technologies for $605.7 million. This deal came after the U.S. government had taken custody of Bankman-Fried’s Robinhood shares when FTX and Emergent filed for bankruptcy protection the previous year.