Extended Trading Hours Cause Robinhood’s Stock To Surge by 25%
Popular investment app Robinhood announced Tuesday it would offer extended trading hours for its users - from 7 a.m. to 8 p.m. ET. Following the announcement, the company’s stock jumped by more than 25%.
Previously, the Robinhood app offered trading services from 9 a.m. to 6 p.m. ET — 30 minutes before the opening and two hours after the market closing. As the company is working toward its goal of offering 24/7 trading, the extended hours are expected to improve the liquidity of Robinhood’s stock.
“Our customers often tell us they’re working or preoccupied during regular market hours, limiting their ability to invest on their own schedule or evaluate and react to important market news,” the company wrote in a blog post. “In fact, we’ve seen a community of Robinhood early birds and night owls who log in exclusively outside of regular market hours. They’re juggling a lot, from full-time jobs to school, families, and side gigs. Our new extended trading hours for equities will give them more opportunities to manage their portfolio at a convenient time for them, whether that’s in the early morning or in the evening.”
The news of Robinhood’s stock surge could not have come at a better time for the company: Even though the investment app ended 2021 with 22.7 million accounts - up 81% from 2020 - the revenue growth in recent years has slowed down, and the value of the company’s stock decreased.
The firm reported revenue of $362.7 million in Q4 2021, up 14% from the same period the year before but less than half the growth rate seen during the summer months. It also fell short of Wall Street’s expectations.
The extended trading hours could potentially help Robinhood against larger players in the fintech space.
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