The Robinhood (NASDAQ: HOOD) stock price situation got worse after the company announced a sharp reduction of its workforce. The shares declined by more than 3.75% on Tuesday and is down by 0.50% in the premarket. As a result, the company’s market cap has crashed to about $8.9 billion, which is significantly lower since it was valued at over $50 billion at its peak.
Robinhood has been under pressure in the past few months as investors focus on its slowing business. The number of active users in its platform has cratered as the financial market has continued its volatility.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
Most importantly, the cryptocurrency market has sold off recently, pushing many people out of the industry. Robinhood has been betting on the crypto industry to boost its growth.
In a statement on Tuesday, the company’s CEO said that the company will fire 9% of its total employees Considering that the company has 3,400 workers, it means that the affected workers are about $300.
The announcement came two days ahead of the company’s quarterly results that are scheduled on Thursday. Analysts expect that the firm’s revenue dropped to about $357 million in the first quarter from the $367 million it reported in the previous quarter. Robinhood has missed both earnings and revenue in the past two straight quarters.
The earnings come a week after Schwab reported weak results. The company, which is valued at over $129 billion, said that it had been affected by the rising volatility in Q1. Schwab is more diversified than Robinhood.
Robinhood faces significant challenges ahead. For one, the industry is highly competitive, with incumbents like Schwab and Interactive Brokers having a substantial market share. Further, the rising interest rates will likely push more day traders out of the company.
Turning to the daily chart, we see that the HOOD stock price has been in a strong downward trend in the past few months. The stock has moved to the important support level, where it has struggled moving below since February.
Robinhood shares have also moved below the 25-day and 50-day moving averages while the Stochastic Oscillator has moved below the oversold level. Therefore, a move below the support at $9.50 will signal that there are more sellers in the market. If this happens, the next key support level to watch will be at $5.82.
To invest simply and easily, users need a low-fee broker with a track record of reliability. The following brokers are highly rated, recognised worldwide, and safe to use:
*Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.
There is good reason to be afraid. Previous down markets have seen declines in excess…
United Parcel Service, Inc. (NYSE:UPS) and FedEx Corporation (NYSE:FDX) are two robust logistics companies. Both…
Canadian crypto mining firm Bitfarms sold roughly $62 million worth of Bitcoin (BTC) in June,…
Invezz does not provide financial advice. Our aim is to simplify information about investing, enabling…
Noma, a Japanese film studio, has announced that it is producing three feature films that…
Bitcoin (BTC) saw continued strength on June 21 as Wall Street trading opened with a…