Robinhood warned the possibility of Dogecoin disasters like it files for IPOs
Robinhood has submitted its IPO, and the popular investment platform responds to unexpected profitability – and potential Dogecoin risk warnings. It was a busy year for the company, who now said it produced a small profit of $ 7.45 million in 2020, compared with $ 107 million in the previous year’s loss.
It is based on a significant income leap, though. In 2020, Robinhood revealed today, generating revenues of $ 959 million; In 2019, that number was $ 278 million.
As expected, Archiving S-1 Robinhood does not only set a company kiosk for why investors may want to consider their stock, but also includes a potential problem that can be faced. The key between them is the turbulent cryptocurrency world, the area where Robinhood has a special interest in amateur investors. In particular, Dogecoin is referred to as a specific field of interest.
“For three months ended March 31, 2021, 17% of our total income came from transaction-based income obtained from the Cryptocurrency transaction, compared to 4% for the three months ending December 31, 2020,” Robinhood’s S-1 reveal it. “While we currently support the Seven Cryptocurrency portfolio to trade, for three months ended March 31, 2021, 34% of our Cryptocurrency transaction-based revenue was caused by transactions in Dogecoin, compared with 4% for the three months ending December 31 , 2020. “
As peace described it, it is a new level of risk above the dangerous Cryptocurrency market. However, $ Doge proved to be very varied based on high profile investors, with mere tweets from Elon Musk which is enough to send skyrocketing prices – or, indeed, crashing.
“Thus, in addition to the factors that have an impact on the broader crypto economics described elsewhere in this section,” Robinhood added, “RHC businesses may be negatively affected, and our net income growth obtained from cryptocurrency transactions can slow down or decrease , if the market for dogecoin worsens or if the price of dogecoin decreases, including as a result of factors such as Dogecoin negative perceptions or increased availability of dogecoin on other Cryptocurrency trading platforms. “
Now, keep in mind that pessimism is the order of the day when it comes to the SEC risk assessment. Businesses are asked to register for any possible challenges, obstacles, or potential practices that can affect them: that, however, is why this is called the “risk factor” section. Robinhood also called everything from Covid-19 pandemic, through seconds and other regulator demands, even only potential loss of reputation that can reduce investor interest.
Nevertheless it is necessary to note how important Dogecoin is to the proportion of the Crypto Robinhood business, and remember that – unlike, for example, Bitcoin – called a meme stock has no theoretical limits on mining. Robinhood had previously removed Crypto’s trade in an effort to calm the turbulent trade, found itself the Target IRE investor after limiting certain popular buying and ownership of shares.
Robinhood plans to register below $ Hood on the Nasdaq when it finally goes public. The company recently approved a $ 70 million fine – the largest ever worn by the Financial Industry Regulatory Authority (Finra) – for its claim to mislead investors with false information, and caused damage to various blackouts in March 2020.