Google-parent Alphabet has reduced its stake in Robinhood Markets by nearly 90%, according to SEC filings. According to a report in news agency Reuters, with this the company has cut its exposure to the trading app operator that has been grappling with a slowdown in its mainstay business.
Alphabet is said to have invested in Robinhood when the latter was an unlisted startup, and the company held over 4.9 million shares in the company as of the end of 2021.
That stake was reportedly worth nearly $419 million when Robinhood shares hit their peak of $85 in August 2021, just a month after the initial public offering. Following the sale, Alphabet now owns 612,214 shares in the company, worth about $7 million, according to Reuters calculations. As of August 3, Robinhood shares have dropped 86% from their record levels.
Cut stakes in two more companies
Alphabet also reportedly trimmed significant positions in Duolingo and 23andMe. The company sold about 523,000 shares of Duolingo. It had previously held more than 6.7 million shares of 23andMe, the gene testing startup co-founded by Anne Wojcicki, the former wife of Google co-founder Sergey Brin.
Robinhood has been facing tough times
Robinhood has been struggling to regain its footing after emerging as the breakout financial technology app during the pandemic. The app had gained popularity among retail traders due to its commission-free trades and easy-to-use interface. The company’s platform also played a major role in fostering a meme stock frenzy in January 2021, when several traders banded together on social media to push up the value of highly shorted stocks like GameStop.
But the Federal Reserve’s tightening cycle last year hammered shares, especially those of high-flying technology companies in which there was a lot of retail interest, denting Robinhood’s business.
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