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Robinhood stock weakens after a drop in July trading activity

Yahoo Finance Live anchors discuss Robinhood stock performance.

Video Transcript

- As we're about a minute to the opening bell, just let's take a pause here.

- OK.

- Let's take a breath, if we will--

- Fine.

- --to talk about what we've been seeing this week because it has been sort of a drifty kind of week--

- Drifty.

- --right?

- I'm gonna use that.

- Oh, you're writing it down.

- Yeah, I'm writing it down.

- That's a lot of pressure when you write things--

- Yeah, I like drifty.

- --down like that. So, yeah, but it has been a drifty kind of week, right? The S&P 500 on the week thus far is up 0.08%--

- That's drifty.

- --on the week. Now, if it does end up gaining on the week, that'll be one, two, three, four, five weeks in a row--

- Drifty again.

- --we've seen an increase. So we've seen this bounce off the bottom. But this week, we've plateaued--

- It's been a weird week.

- --out a little bit.

- A weird week of retail earnings-- Target, massive earnings. BOMB missed by $0.35. Walmart beats by $0.15. Pretty good comments on back to school, but it's been all over the map. Sentiment has been all over the map.

- And then we've had, of course, the meme stocks return-- Bed Bath Beyond, in particular, going up a lot and now crashing down with this Ryan Cohen sale. As we've seen this increase in stocks overall, obviously, people have come back into the memes. They've said, OK, risk is back.

- Yeah, Weber, too.

- Maybe-- yes, Weber has kind of been memeified--

- Yes.

- --to some extent, which has been an interesting one as well. So here we have the opening bell on this Friday morning, and we'll see where the week ends up.

Now, something else I didn't mention, by the way, is that it's an options expiration day. We had some options expire yesterday. We'll have some more expire today. So we could see a decent amount of bouncing around over the course of the session.

- Liberty, bettering human lives, ringing that opening bell here on this Friday morning here on Wall Street. Julie, we're also looking at shares in Robinhood. This is something that flew a little bit under the radar until you flagged it in our nifty Slack channel this morning here.

Robinhood coming out with trading activity for July, and frankly, it was pretty ugly and continuing that theme of a struggling trading platform. That has really been the case for most of this year, Robinhood noting monthly active users at the end of July were 13.2 million, down slightly versus June, trading volumes in July down slightly from June-- so just not another good month here for Robinhood.

- Yeah, total assets under custody in July versus June of the prior year down 21% to $74.6 billion, so definitely a little bit of weakness here. I'm looking at some of the analysts' commentary on these Robinhood numbers here-- Morgan Stanley analysts saying that this showed softer user growth and engagement, which is, you know, obvious, I think, from the numbers, although Richard Repetto over at Piper Sandler said the results were generally in line to slightly better than he had estimated but still just shows this-- what, to me, is interesting about this is that we've just been talking about the bounce that we've been seeing in stocks from the lows.

We've been talking about a return of meme stock interest. And yet these guys don't--

- Oh, you took my--

- --really seem to be benefiting--

- --I was just going to say that.

- I'm sorry.

- Maybe we're-- I think-- are we just, like--

- It's better--

- --becoming one here on the--

- It's better when we argue.

- Yeah, it is.

- I think we can all agree--

- Can we argue?

- --it's better when we argue.

- I love Robinhood. I think it's an amazing company. Julie, you go.

Well, look, no, you made a good point. If they do not show improved trading volumes and activity for August-- and, to your point, that's when we start to see a lot of this renewal in the meme trade-- that is a huge red flag.

- Right.

- And then your second thought should be, because they have fired tons of people here in the past three months at Robinhood because they're losing lots of money, has that impacted-- how has that impacted the culture in Robinhood? Are they really truly meeting the needs of their customers? Because they have just laid off a lot of people. And, as you know, when you do that it really harms the culture and the internals of a company.

- Yeah. Well, Wayfair, also, speaking--

- Absolutely.

- --speaking of that kind of situation.