Vlad Tenev, CEO and co-founder Robinhood Markets, Inc., is displayed on a display screen throughout his firm’s IPO at the Nasdaq Market website in Times Square in New York City, U.S., July 29, 2021.
Brendan McDermid | Reuters
Robinhood CEO Vlad Tenev stated Wednesday that the retail brokerage is not seeking to be acquired despite saying main layoffs after one other quarter of shrinking lively customers.
“In one phrase: No,” Tenev stated on an investor name when requested about probably being purchased by one other firm. “I feel we’re in an awesome place as a stand-alone firm. I like us as a stand-alone firm.”
In May, FTX CEO Sam Bankman-Fried revealed a stake in Robinhood, spurring hypothesis a few potential takeover bid from the crypto-focused brokerage. Bankman-Fried has since stated FTX is not seeking to purchase Robinhood outright.
Tenev did say that Robinhood was on the lookout for potential acquisitions of its personal. The firm reported $6 billion in money on its stability sheet at the finish of the quarter.
“We truly see alternatives, significantly in this market surroundings, to leverage the stability sheet that we have now … to accumulate firms that speed up our roadmap,” Tenev stated.
The Robinhood investor name got here a day after the firm introduced it was laying off 23% of its workforce. The firm additionally reported a smaller-than-expected loss for the second quarter, however month-to-month lively customers declined and income was down greater than 40% 12 months over 12 months.
Shares of Robinhood rose 11.7% on Wednesday following the layoff announcement. Several Wall Street analysts stated the company’s cost-cutting efforts could be a boost to the stock.
Robinhood reduce its full-year expense steering by roughly $290 million, which incorporates about $70 million decline in anticipated share-based compensation. Tenev stated that the firm plans to have optimistic adjusted EBITDA — a measure of profitability that excludes sure prices akin to curiosity and taxes — by the finish of the 12 months.
The firm pointed to price hikes from the Federal Reserve as a income development in the type of curiosity. CFO Jason Warnick estimated that each one-quarter of a share level price hike interprets into about $40 million of annualized income for Robinhood.
“The exact advantage of price hikes will rely on how balances and buyer charges differ over time,” Warnick stated.
The CFO additionally stated Robinhood’s belongings underneath custody rose again above $70 billion in July after declining in the second quarter.
Despite Wednesday’s rally, Robinhood’s inventory is nonetheless down almost 42% for the 12 months and greater than 70% from the place its IPO was priced final 12 months.