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 neglected of the reshuffle.
• Robinhood posted robust 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 robust 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 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 listing, 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 steadiness sheets.

Based mostly in Tysons Nook, Virginia, the corporate has develop into synonymous with company crypto adoption.

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

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

Robinhood’s robust 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, properly above analyst forecasts.

Crypto buying and selling income got here in at $160 million, almost 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 prime 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 current 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 yr that Nevada and New Jersey gaming regulators couldn’t implement their bans in opposition to Kalshi, which affords 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 enjoying discipline.

“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 beneath regulatory hearth within the EU after launching tokenized inventory merchandise linked to non-public corporations 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 accredited the tokens and warning traders to be cautious.

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