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On Wednesday, February 8th, the online broker Robinhood published its earnings report for Q4 sending its stock up more than 5%. The rise came despite missed estimates and at least in part as the result of the pledge to cancel $500 million in bonuses to executives.
Robinhood Executives Cancel $500 Million in Bonuses After Missing Estimates in Q4
This Wednesday, Robinhood published its Q4 earnings report. While analysts generally expected a 15-cent per share loss, the broker reported a 19-cent loss. The firm also announced missing revenue expectations as it generated $380 million instead of the forecast $396 million.
Robinhood’s crypto wallet—which saw a beta launch last September—also reported poorer performance than was anticipated. The cryptocurrency trading revenue dropped 24% from Q3 and was down to $39 million from the previous $51 million.
Perhaps the major silver lining of the report was the announcement that Robinhood would cancel $500 million in bonuses to executives. According to the firm’s CEO Vlad Tenev, the decision is aimed at ensuring “the company has as many resources as possible to deliver value to customers and shareholders”.
The report sent Robinhood shares a little more than 5% into the green at the time of writing up to the price of $11. The broker’s stock is up nearly 30% year to date but is still significantly lower than it was on February 8th, 2022 when it stood at nearly $14.
Robinhood Plans to Buy Back SBF’s 7% Stake in the Company
On Wednesday, Robinhood also revealed its board approved a plan to purchase company shares owned by FTX’s former CEO, Sam Bankman-Fried. SBF purchased approximately 50 million shares—7% of the company—in May of 2022. The stake became a matter of contention after FTX filed for bankruptcy last November.
Early in January, Sam Bankman-Fried attempted to block his 50 million Robinhood shares from creditors claiming he needed them to fund his legal defense. SBF previously claimed to have only about $100,000 left. Around the same time, the DoJ ordered the seizure of the shares, along with the FTX balance with the Silvergate bank.
More recently, in early February, Emergent Fidelity Technologies, the Antigua and Barbuda company Sam Bankman-Fried used to purchase his 7% Robinhood stake, joined FTX in bankruptcy. Unlike previous filings adjacent to FTX’s chapter 11 proceedings, Emergent Fidelity Technologies immediately made an effort to join its case with the main FTX bankruptcy.