Cathie Wood’s ARK Invest has increased its exposure to Robinhood Markets, purchasing roughly $13 million worth of shares after the trading platform secured a role in a new government-backed savings initiative.
ARK’s Tuesday trade disclosures show a fresh accumulation of Robinhood shares across multiple funds. ARK Innovation ETF (ARKK) led the charge, purchasing 132,116 HOOD shares. Additional buying came from the ARK Next Generation Internet ETF (ARKW), which added 33,607 shares, and the ARK Fintech Innovation ETF (ARKF), which picked up 16,918 shares.
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Robinhood tapped for Trump Accounts
The purchase came after the US Treasury said Robinhood would serve as brokerage and initial trustee for Trump Accounts, a new tax-advantaged investment account program for children. The Treasury has said eligible US citizens born between Jan. 1, 2025 and Dec. 31, 2028 would receive a $1,000 government contribution into those accounts.
According to a Monday announcement, BNY was designated as financial agent and will manage the initial accounts and help develop the Trump Accounts app. Robinhood will serve as brokerage and initial trustee, while the Treasury said it will retain control over the app and operations for the initial accounts.
Robinhood has also pledged to match the government’s $1,000 contribution for eligible children of its employees.
Robinhood’s stock closed at $69.65, down marginally on the day, but surged in after-hours trading to $74.92, marking a gain of more than 7.5%, according to data from Yahoo! Finance.
Robinhood shares are down 38% YTD. Source: Yahoo! Finance
At the closing price of roughly $69.65 per share, ARK’s total purchase of 182,641 shares equates to approximately $12.7 million. This marks the first time the investment firm has bought Robinhood shares in nearly a month.
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Robinhood launches $1.5 billion share buyback
Last month, Robinhood received board approval to buy back $1.5 billion of its shares over the next three years, combining $1.1 billion in new repurchase capacity with amounts rolled over from a previous program. The buyback comes as Robinhood shares have struggled this year amid a broader stock and crypto downturn.
In February, Robinhood reported Q4 revenues of $1.28 billion, missing analyst expectations of $1.34 billion, while crypto revenues dropped 38% to $221 million. Net income fell 34% to $605 million, with EPS slightly beating estimates at 66 cents.
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