Google parent Alphabet has announced a significant reduction in its stake in Robinhood Markets, lowering its exposure to the trading app operator that has been facing challenges in its core business. Alphabet initially invested in Robinhood when it was still an unlisted startup and held over 4.9 million shares in the company by the end of 2021. At its peak in August 2021, Robinhood shares were valued at $85, making Alphabet’s stake worth nearly $419 million. However, the recent sale has reduced Alphabet’s ownership to 612,214 shares, equivalent to approximately $7 million. Robinhood shares have plummeted 86% since reaching their record levels, as the company continues to struggle after gaining popularity during the pandemic. Robinhood’s commission-free trades and user-friendly interface attracted retail traders, leading to a meme stock frenzy in January 2021. However, the Federal Reserve’s tightening measures and the decline in high-flying technology stocks affected Robinhood’s business. Despite surprising Wall Street with its first profitable quarter as a public company, Robinhood has experienced a decrease in monthly active users, declining to 10.8 million compared to the previous quarter and 3.2 million compared to the previous year. To counter this weakness, Robinhood has been exploring alternative revenue streams, as demonstrated by its recent acquisition of financial technology and credit card firm X1.
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