Robinhood Soars on S&P 500 Inclusion as Technique Will get Snubbed

Shares of Robinhood jumped 7% in after-hours buying and selling Friday after the retail brokerage was named to the S&P 500.

Key Takeaways:

• Robinhood shares jumped 7% after being added to the S&P 500, becoming a member of the index on September 22.
• Technique, regardless of a $95B valuation and $70B in Bitcoin holdings, was omitted of the reshuffle.
• Robinhood posted sturdy Q2 earnings, with $989M in income and $386M in revenue.

Robinhood (HOOD) closed simply above $101 and soared previous $108 in prolonged buying and selling following the announcement.

The corporate’s share value has climbed over 150% year-to-date, pushed by sturdy earnings and rising retail curiosity in shares and crypto.

Robinhood to Be a part of S&P 500 on September 22

Robinhood will formally be a part of the index on September 22, alongside ad-tech agency AppLovin, in line with S&P Dow Jones Indices.

Whereas Robinhood celebrates its inclusion, Technique, the Bitcoin treasury agency previously often called MicroStrategy, was left off the checklist, regardless of assembly S&P’s $20 billion market cap requirement.

Technique, which now holds greater than $70 billion in Bitcoin, noticed its shares fall 3% in after-hours buying and selling following the announcement.

The omission stunned some observers, given Technique’s $95 billion valuation and its pioneering function in bringing Bitcoin to public stability sheets.

Based mostly in Tysons Nook, Virginia, the corporate has turn out to be synonymous with company crypto adoption.

The S&P reshuffle comes amid rising institutional curiosity in digital property and a extra favorable political setting.

Earlier this 12 months, Coinbase was added to the S&P index, signaling rising recognition of crypto-native firms in conventional monetary markets.

Robinhood’s sturdy fundamentals additional fueled its rally. In Q2, the corporate posted $989 million in income, up 45% year-over-year, beating Wall Road estimates.

Internet revenue hit $386 million, with earnings per share of $0.42, nicely above analyst forecasts.

Crypto buying and selling income got here in at $160 million, practically doubling year-over-year however down from the earlier quarter’s $252 million.

In the meantime, revenue from choices buying and selling and equities reached $265 million and $66 million, respectively, making choices Robinhood’s high income stream as soon as once more.

Robinhood Sues Nevada, New Jersey Regulators Over Occasion Contracts

Final month, Robinhood Derivatives took authorized motion in opposition to regulators in Nevada and New Jersey, accusing the states of unfairly blocking its entry into the sports activities occasion contracts market, regardless of latest federal courtroom rulings in favor of rival platform Kalshi.

The agency stated it started providing occasion contracts in each states after federal judges dominated earlier this 12 months that Nevada and New Jersey gaming regulators couldn’t implement their bans in opposition to Kalshi, which gives contracts regulated by the U.S. Commodity Futures Buying and selling Fee (CFTC).

Robinhood argued that regulators have ignored these rulings and continued to threaten enforcement motion, creating an uneven taking part in subject.

“If state regulators are permitted to behave in opposition to Robinhood however not Kalshi, then Robinhood will lose out within the sports activities occasion contracts area,” the corporate stated in its filings.

In the meantime, Robinhood has come below regulatory fireplace within the EU after launching tokenized inventory merchandise linked to personal firms like OpenAI and SpaceX.

The Financial institution of Lithuania confirmed it’s investigating the legality and investor disclosures associated to those blockchain-based “Inventory Tokens,” which launched on June 30.

OpenAI publicly disavowed any connection, stating it by no means permitted the tokens and warning buyers to be cautious.

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