Robinhood Choppy After CFO Downplays Shiba Inu Rumor

© Reuters

By Dhirendra Tripathi

AiVIF.com – Robinhood stock (NASDAQ:HOOD) stock was volatile in Thursday’s premarket after the company’s chief financial officer downplayed rumors that it is about to start offering trading in cryptocurrency Shiba Inu SHIB/USD.

"“There aren’t compelling reasons strategically for our business to put any meaningful amount of our corporate cash into cryptocurrencies,” Jason Warnick said at a virtual event hosted by The Wall Street Journal.

CEO Vlad Tenev has already said that the company isn't likely to be at the forefront of listing crypto assets for trade, and Warnick repeated that, with a nod to various regulatory initiatives on digital assets coming down the line from Washington.

“We’re a highly regulated company in a highly regulated industry, and we think it’s important that we get a bit more clarity from regulators,”  the WSJ reported Warnick as saying. He noted, though, that customers’ desire to see more coins being available for trade on the platform “is not lost on us.”

Bitcoin (BitfinexUSD) forms the bulk of Robinhood’s revenue from trades in cryptocurrencies, a revenue structure the platform has been looking to de-risk. According to a Bloomberg report earlier, it is testing a new crypto wallet and cryptocurrency transfer features that would allow users to send and receive digital currencies through its trading app.

At $51 million, cryptocurrencies contributed to almost a fifth of the $267 million in revenue Robinhood earned from transactions on the platform in the September quarter.

Robinhood stock was up 0.7% initially before giving up the gains and traded 0.3% lower later.

Shiba Inu, one of a handful of 'meme coins' to rise to prominence last year, had risen some 16% on the rumor which circulated on Wednesday, which was based on a mockup of headlines formated to look like a regular wire service report.

It still traded 12% up at 0430 ET (0930 GMT), despite the apparent lack of substance to the rumor.

Shiba Inu has extremely limited utility with barely a few hundred merchants worldwide accepting it as payment. It is still down more than 60% from its 2021 peak.