Robinhood Faces Lingering Issues a Year After Meme-Stock Mania

But the day after GameStop reached its peak, Robinhood abruptly restricted trading in some meme stocks, claiming that it had been forced to do so by a liquidity crunch, Wall Street rules and clearinghouse limits. The restrictions caused the stocks to plunge, prompting lawsuits, congressional hearings and a Securities and Exchange Commission investigation.

“A new generation turned the act of investing into a mass movement,” Robinhood said in a statement on Tuesday about the market events last year. “We never want our customers to be surprised with trading restrictions again,” it added, noting that it had bolstered its risk and compliance infrastructure, among other things. On Wednesday, the S.E.C. chairman, Gary Gensler, issued a brief statement saying the agency was still working on recommendations to make the market “as fair, orderly, and efficient as possible.”

Robinhood said on Thursday that it had lost $3.69 billion last year, including $423 million in the last three months of 2021. Revenue in the quarter was up 14 percent, to $363 million, compared with the same period in 2020. That year it made a profit of $13 million, including $7 million in the last quarter of that year.

“We had a momentous year, nearly doubling the number of customers on the platform and making critical investments in our team and infrastructure to support growth,” Vlad Tenev, the co-founder and chief executive, said in a news release accompanying the financials. “This year, we’ll expand our ecosystem of products.”

Analysts had expected the company to say it lost more than $300 million in the fourth quarter.

Robinhood’s stock dropped 15 percent in aftermarket trading on Thursday, and has lost about two-thirds of its value since it went public this summer, stoking rumors that it could become a takeover target. Lingering issues from the meme stock rally — and related trading restrictions — has marred the outlook, but the company did get good legal news on Thursday before reporting its finances.


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