One year after the GameStop frenzy, Robinhood hits a new low because people just aren’t trading stocks as much anymore

• Robinhood shares sank 15% on Friday following the release of Q4 financial results. 
• The trading app forecast Q1 revenue of “less than $340 million,” lower than Wall Street’s outlook of $448 million. 
• Monthly active users declined to 17.3 million in Q4 from the previous quarter. 

Robinhood stock tumbled to a record low Friday after the trading platform’s fourth-quarter report indicated declining interest in trading.

Monthly active users fell 8% from the prior quarter to 17.3 million, according to the quarterly report released late Thursday.

Robinhood generated $52 million from stock-related trades, up 4% from the third quarter but down 35% from a year ago. Cryptocurrency-based revenue dipped 6% sequentially to $48 million, though it’s up 304% annually as more coins were added to the platform.

Robinhood stock fell as much as 15.5% to $9.81 early Friday then trimmed the decline to 6%. The price hit the lowest since the company’s shares began trading publicly on July 29, 2021. 

“Despite what was a strong market for equities and crypto (S&P 500 up 11% and Bitcoin up 7%), Robinhood  customer  assets  were  up  just  3%,  suggesting  investor underperformance, outflows, or both,” JPMorgan equity analyst Kenneth Worthington wrote in a note.

The investment bank on Friday held to its underweight rating on Robinhood stock.

The company posted a fourth-quarter per-share loss of 49 cents, wider than a projection of 45 cents from Refinitiv. 

For the first quarter, year-earlier comparisons will get tougher as Robinhood comes up on the anniversary of the meme-stock frenzy that began with the explosion in GameStop shares.

Management sees first-quarter revenue of less than $340 million, down from $363 million in the fourth quarter and 35% below year-ago levels. And that view “assumes some incremental improvement in trading volumes versus what we have seen so far,” the company said. Meanwhile, analysts surveyed by FactSet had anticipated, on average, $448 million in first-quarter revenue. 

Robinhood angered many retail investors when the company in January 2021 halted buying of shares in GameStop, AMC, and other meme stocks during a massive rally. Robinhood has since pledged to win back the trust of outraged customers.