Robinhood stock hits all-time low on layoffs, earnings miss

Yahoo Finance Live’s Julie Hyman and Brian Sozzi discuss Robinhood stock reaching an all-time low amid laying off 9% of its full-time employees.

Video Transcript

BRIAN SOZZI: And this was not a good quarter from Robinhood by any stretch of the imagination. Trading activity under pressure. Crypto volumes under pressure. They did say something, though, very interesting on the conference call, Julie. They have a goal to reach profitability by the end of the year.

And I think what you're seeing in the stock price here from Robinhood in the market is just complete doubt that they can achieve that metric, even though they let go of 9% of their workforce.

JULIE HYMAN: Right. I mean, the question is, how do they get there, right? Monthly active users down by 10% in March year over year. Average revenue per user was down 62% in the first quarter. And the company says this was because users just had lower balances. The market's gotten hit. People aren't trading as much.

And so even if-- and I believe, if I'm not mistaken, it was Dan Dolev who we were talking to earlier in the week who said Robinhood is a really compelling experience. But the experience can be as compelling as you want it to be. If people are not making as much money in the market, then the company's not making as much money.

And if people are not compelled to enter the market as much because the market's not doing well, then Robinhood's not making as much money. So that's a problem.

BRIAN SOZZI: If this happened-- if they're mentioned-- you're right, Julie. If they would have mentioned, this time last year, that they expected to achieve profitability by the end of this year, that probably would have been embraced by the market. But look, you're having a flop of an IPO here in Robinhood, full stop. The stock has gone straight down since they went public, really, at the height of the meme stock mania.

Now, a positive thing here is that they have a lot of cash, I believe $6 billion. So they have money to invest in whatever new products they are trying to pump out there. They listed a long laundry list of them on the earnings call. Don't really feel like running through them right now. But there's a long laundry list of them trying to release some new products here to drive, ultimately, profitability. But the Street remains very skeptical. This stock is in a bear market in a big way.