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Cathie Wood Still Bullish on Robinhood: Ark Bought Shares

Ark Investment Management on Wednesday purchased 2.24 million shares of brokerage app Robinhood, now valued at about $78 million.
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Cathie Wood is bullish on Robinhood  (HOOD) - Get Robinhood Report despite its disappointing earnings report pn Tuesday.

Her Ark Investment Management bought 2.24 million shares of the securities brokerage app Wednesday. That stake was valued at $78.13 million in recent trading, down from $79.39 million at Wednesday’s close.

Robinhood recently traded at $34.80, down 2%. It has given back 12% this week, thanks to the earnings news. And it is now down 8% from its July 28 IPO price of 8%.

Ark bought the shares in its flagship Ark Innovation ETF  (ARKK) - Get ARK Innovation ETF Report, its Ark Next Generation Internet ETF  (ARKW) - Get ARK Next Generation Internet ETF Report and its Ark Fintech Innovation ETF  (ARKF) - Get ARK Fintech Innovation ETF Report.

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The firm has purchased Robinhood since its IPO, and the stock now makes up 1.33% of ARKK, CNBC reports.

As for Robinhood’s earnings, it posted a wider-than-expected loss for the third quarter, with new-account growth slowing amid a slowdown in activity related to cryptocurrencies.

The alternative brokerage posted a loss of $2.06 a share on revenue of $365 million, vs. a loss of 5 cents a share on revenue of $270 million in the year-earlier quarter. Analysts surveyed by FactSet had been expecting a loss of 67 cents a share for the latest period.

“Crypto activity declined from record highs in the prior quarter, leading to considerably fewer new funded accounts,” the company said in a statement.

The company offered subdued guidance for the fourth quarter. “For the three months ending Dec. 31, we anticipate that many of the factors that impacted our third-quarter results, such as seasonal headwinds and lower retail trading activity, may persist.”