(Reuters) -Robinhood Markets Inc said on Wednesday that lower trading activity was likely to affect its third quarter, after it reported a 131% jump in second-quarter revenue fueled in part by a surge in cryptocurrency trading.
Shares of Robinhood, owner of the trading app that emerged as the gateway for investors seeking to get in on this years mania for so-called meme stocks, were recently down 5.32% in aftermarket trading after the brokerage said the current quarter will also be affected by fewer funded accounts.
Robinhood’s platform allows users to make unlimited commission-free trades in stocks, exchange-traded funds, options and cryptocurrencies. Its simple interface made it popular with investors trading from home during the COVID-19 pandemic, helping to spark breathtaking moves in the shares of companies such as Gamestop Corp and AMC Entertainment Holdings this year.
“They expected three months ago that September will be seasonally weak, said Chaim Siegel, analyst at Elazar Advisors. Now it sounds like either they’re seeing signs of that building and getting a little more concerned about what they see for the current quarter.
The company posted net revenue of $565 million for the quarter ended June 30 compared with $244 million a year earlier.
Robinhood enraged some investors and U.S. lawmakers earlier this year when it restricted trading in some popular stocks following a 10-fold rise in deposit requirements at its clearinghouse. It has been at the center of many regulatory probes.
(Reporting by Sohini Podder in Bengaluru; John McCrank and Sinead Carew in New York; Editing by Arun Koyyur and Steve Orlofsky)