Cathie Wood’s Ark Investment Management has bought 2.2 million shares in Robinhood (HOOD) as they fell in price by 8% on Tuesday.
Robinhood shares, Cathie Wood’s investment
The so-called Rock Star of the stock market, Cathie Wood, continues to cultivate her interest in crypto-related companies, so much so that she has now taken further steps with Robinhood, the zero-commission trading app that has become popular especially in the US.
ARK reportedly bought at least 2,240,680 HOOD shares in a first round purchase of 1,728,431 shares and another of 320,211 shares, all on Wednesday. Not only that, ARKF, a fund that invests in FinTech innovation, also saw another 192,038 shares added.
The move by Cathie Wood and her funds reportedly came after HOOD’s price dropped 8%, from $39.7 to the current $35.04. It is worth noting that since first debuting on the Nasdaq in July, Robinhood’s shares have fallen 58% from around a peak of $85.
Volatility which was already seen in the past, when at the beginning of last August 2021, a week after its debut, HOOD would have gone from $32 billion in market capitalization to $60 billion in a few days. A rise that soon after saw the stock plunge 27% in value.
Cathie Wood’s Ark Invest had already bought 1.3 million shares on the first day of Robinhood’s launch and is still following the volatility, purchasing shares in a “buy the dip” fashion.
Robinhood, the relationship with crypto
According to the Q3 report, Robinhood generated a total of $365 million in net revenue in the third quarter of 2021, which is well below the $437 million predicted by Wall Street analysts.
Disappointing numbers given by a large decrease in revenue from cryptocurrency transactions. That’s a 78% drop in earnings from cryptocurrency transactions, with Robinhood’s net revenue also down 35% from Q2 to Q3.
In fact, back in the summer, in the published Q2 report, Robinhood had shown that Dogecoin accounted for 62% of the platform’s cryptocurrency transaction revenue.
Out of a total crypto transaction revenue executed in Q2 of $233 million, compared to just $5 million in the January-March 2021 period, 62% would be due to Dogecoin transactions.
Good result for Elon Musk’s favourite “crypto meme”, even though there are only 7 crypto offerings on Robinhood, including Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH) and Litecoin (LTC).
Cathie Wood and crypto
The Rock Star of the stock market Cathie Wood is increasingly involved in the crypto sector, evidenced by her substantial investments in related companies.
Indeed, like Robinhood in August, Ark Invest is reported to have bought more than a million shares of Grayscale Bitcoin Trust (GBTC).
Not only that, but this summer Wood was involved in “the talk” with Tesla’s Elon Musk and Twitter’s Jack Dorsey in a live debate regarding Bitcoin.
Whereas a fortnight ago, Wood with her Ark Investment, also filed an application with the SEC to launch an ETF based on Bitcoin Futures.