Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL), the parent company of Google, said on Monday it had sold all of its remaining shares in Robinhood Markets Inc (NASDAQ:HOOD), the online trading app operator.
The tech giant said it had dissolved its stake in Robinhood Markets, according to a report by Reuters. Although Alphabet’s remaining holding amounted to little more than 600,000 – worth around $5M – the divestment followed a major sale in August when it unloaded 90% of its shares in HOOD.
Robinhood shares were trading 0.8% lower to $8.23 during early trading on Monday, but are down 38% since Alphabet’s August divestment.
Prior to the August sale, Alphabet’s holding in HOOD was worth around $65M – not a huge sum in terms of GOOG’s net worth – but indicative of the excitement that HOOD’s story generated after its August 2021 $38-a-share initial public offering.
The trading app, founded in 2013, had seen rapid growth as record levels of private investors took to the markets during the COVID-19 pandemic, hitting 22.5 million users and $100 billion in assets under custody, in the second quarter of 2021.
This was partially driven by the popularity of so-called ‘meme’ stocks – many of which were being shorted by hedge funds, then purchased by hundreds of thousands of retail investors, stoked by high-profile social media campaigns.
The eurphoria didn’t last, however, and – following a large price pop at its IPO, going as high as $85 – the shares began to decline as traders became more wary against a backdrop of rising inflation and interest rates.
In its last quarterly financial report, published last week, HOOD reported a 13% year-on-year decline in third-quarter transaction revenue, while active monthly users fell by 16% to 10.3 million – contributing to a net quarterly loss of $85 million.
Produced in association with Benzinga