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Robinhood Markets shares fell Thursday following reports that Morgan Stanley plans to add cryptocurrency trading to its E* trading platform.
The online trading platform also said that full-year costs will be higher than previously expected due to costs associated with the acquisition of TradePMR.
News sets offset better profits and sales than planned for the first quarter.
Robinhood Markets stock (Food) Morgan Stanley (MS) I am planning to add Cryptocurrency Trading to the E*Trade Platform. If a major bank enters crypto trading, Robinhood could face increased competition.
Additionally, Robinhood also warned about the potential impact of the Federal Reserve interest cuts in its first quarter revenue report on Wednesday, saying it would cost more than initially thought due to the recent acquisition.
The company sees equity-based compensation of between $2.085 billion and $2.185 billion for the full year, with adjusted operating expenses and stock-based compensation compared to previous estimates of $2 billion to $2.1 billion. It is explained due to the expected costs associated with the acquisition of TradePMR for management and management platforms closed in the first quarter.
CFO Jason Warnick also said in Robinhood’s revenue that, according to a transcript provided by Alphasense, if the Fed cuts borrowing costs by 25 basis points, it would impact around $50 million as a headwind on net interest income.
The news offset a first quarter results that surpassed the company’s expectations. Robinhood reported a $0.37 earnings per share (EPS) of $927 million against 50% year-on-year revenue. Analysts surveyed by visible Alpha had predicted $0.32 and $915 million, respectively.
Despite a 1.2% decline today, Robinhood Markets shares have grown by around 30% since the start of the year.
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