Robinhood (HOOD) shares extended their recent rebound Monday as star fund manager Cathie Wood added to her holdings in the online trading app.
Wood's flagship ARK Innovation ETF (ARKK) added around 2 million shares in Robinhood during early Friday trading, when the stock fell to a post-IPO low of $9.94 each following disappointing December quarter earnings and a weak near-term outlook.
A further 1.5 million shares were split between two other Wood-managed ETFs, taking the total purchase value to around $31.1 million, according to her website.
Robinhood shares were marked 11.8% higher in early afternoon trading Monday to change hands at $14.25 each, a move that would still leave the stock with a six-month decline of around 62.3%.
Short interest in the stock remains elevated, as well, with recent data from S3 Partners showing bets against the group totaling $476 million, or 10.9% of the stock's outstanding float.
Robinhood posted a steeper-than-expected fourth quarter loss of $423 million late last Thursday and said near-term revenues would come in sharply lower than Street forecasts.
Robinhood, which found itself at the center of the meme-stock controversy last year when it froze access to certain customer accounts, said March quarter revenues would fall below $340 million, likely as a result of lower equity and cryptocurrency trading volumes.
For the three months ending in December, Robinhood had a net loss of $423 million on revenues of $363 million, with compensation expenses eating into its bottom line and monthly active users falling 8% from the three months ending in September.
"Robinhood is in a transition period out of foundational infrastructure, support and reliability investments, in which the headcount doubled driven by areas such as compliance, support and engineering and entering a period of increased innovation," said KeyBanc Capital Markets analyst Josh Beck, who carries and 'overweight' rating with a$15 price target on the stock.
"Trading volumes meaningfully slowed in recent months as the growth/crypto/meme craze faded, leading to a 1Q22 guidance of less than -35% year-on-year growth," he added. "Although feel like 2022 is de-risked and on balance see more than could produce upside (e.g., growth/crypto markets bottoming, sec lending, crypto wallet) than downside (e.g., further growth/crypto retrenchement, execution delays)."
