We are not in the market to sell Robinhood, says Robinhood co-founder and CEO Vlad Tenev during an interview on CNBC’s Squawk Box. We like where we are right now. We have big ambitions in terms of growing our business, so we are very focused on that and that alone right now. The company recently announced it has reached four million users, with more than $100 billion in transaction volume over the last year.
Robinhood’s CEO, Vlad Tenev, Said Wednesday That the Company is not Seeking
CEO Vlad Tenev said Wednesday that Robinhood is not seeking acquisition despite announcing major layoffs after another quarter of dwindling active users.
he said no on an investor call when he was asked about being bought by another company. I think we’re in a great position since we are a stand-alone company. I love us that way.”
FTX CEO Sam Bankman-Fried revealed an interest in Robinhood in May, sparking speculation about a possible takeover bid. Since then, Bankman-Fried said he is not looking to buy Robinhood. Tenev also stated that Robinhood is looking for acquisitions. The company has $6 billion in cash on its balance sheet.
ten says in this market environment, “We see opportunities to leverage the balance sheet that we have…to purchase companies that will accelerate our growth.”
The Robinhood Stock call Happened the Same Day the Company Announced
The Robinhood investor call came on the same day that the company announced its plans to lay off 23% of its workforce. They reported a smaller-than-expected loss for the second quarter, but user growth was minimal, and revenue was 40% lower than it was last year.
On Wednesday, Robinhood shares rose 11.7% following the layoff announcement. Wall Street analysts said the company’s cost-cutting efforts might boost the stock.
Essentially, Robinhood adjusted its expectations to be lower by roughly $290 million, $70 million of which is the loss of revenue in share-based compensation. Tenev said that the company intends to end the year with a profit by way of EBITDA, a measure of profitability that excludes costs such as interest and taxes.
CFO Jason Warnick Estimates That every Quarter Percentage Point Increase Results
The company cites the Federal Reserve’s increase in interest rates as the reason for its revenue growth. CFO Jason Warnick estimates that every quarter percentage point hike results in an additional $40 million in revenue.
whether rate hikes will be beneficial to you will depend on what happens to your balances and interest rates over time, Warnick said. He also noted that in July, the value of assets being managed by Robinhood exceeded $70 billion after a drop in the second quarter.
Despite Wednesday’s rally, Robinhood’s stock remains down more than 42% on the year and more than 70% from where it was priced when it was issued as an IPO last year.