Robinhood share price and revenues tank as Dogecoin popularity wanes

Robinhood share price tumbled 10% after reporting a 35% revenue drop in Q3. Execs say a surge in Dogecoin trade saw record numbers in Q2.

Robinhood’s share price tumbled 10% on Wednesday after its third-quarter report revealed revenue fell 35% to $365 million.

Shares in the popular trading app closed Tuesday at $39.00 and fell to a low of $35.04 on Wednesday, closing at $35.44 — 10% below its July listing price of $38.00.

“Crypto activity declined from record highs in the prior quarter, leading to considerably fewer new funded accounts,” Robinhood said in its third-quarter earnings report.

Traditional trading appears to be a better draw for the Menlo Park-based exchange’s users. Its customer base has nearly doubled since the end of last year.

The Q3 report also showed:

  • Net funded accounts increased 97% to 22.4 million.
  • Monthly active users increased 76% to 18.9 million.
  • Assets under custody increased 115% to $95 billion

But the amount it’s earning from fees is down 36% to $65 per customer, compared with $102 this time last year.

Robinhood share price go down, Coinbase stock go up.

Robinhood stock fell almost another 3% during Thursday morning trade to below $34.50.

Q2 Dogecoin surge to blame for Robinhood share fall

Newly hired CFO Jason Warnick told CNBC that Dogecoin’s popularity in Q2 brought a surge of new customers to the platform. 

The second quarter was “one of those idiosyncratic market events where there’s this massive interest specifically in DOGE,” Warnick said.

While Dogecoin is up almost 20% in the past week, knock-off Shiba Inu (SHIB) is eclipsing those returns.

A petition to list the meme coin on Robinhood has garnered over 340,000 signatures. SHIB is up over 170% over the last week, and a pearl-clutching 96,810,000% in the past year.

But chief Vlad Tenev told investors on Tuesday that he would be taking a cautious approach to adding new tokens to their crypto offering — likely fearing another hefty slap on the wrist from regulators.

“We’re having to carefully evaluate whether we can add new coins in a way in a way that’s safe for customers and in line with regulatory requirements,” Tenev said.

[Read more: Robinhood’s crypto hiring spree is real — 8 open jobs including CFO]

In July, the trading platform said it expected to pay a $30 million fine to the New York State Department of Financial Services (NYDFS).

An NYDFS investigation found it failed to employ proper cybersecurity and anti-money laundering measures on its crypto platform.

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