Cathie Wood's ARK Invest bought Robinhood shares twice in early September after selling the stock for much of the summer. The reversal followed a one-day 17% jump in the share price and came just before Robinhood released August operating data showing growth in event contracts, platform assets, and margin lending.
ARK Invest's flagship ARK Innovation ETF bought 28,589 shares of Robinhood on Sept. 4, then added 27,083 more on the first trading day after Labor Day. The purchases reverse course: ARK sold Robinhood shares through much of the summer, unloading a large block in July and selling again as recently as Aug. 26.
The first buy came one day after Robinhood shares jumped about 17% in a single session. Even after that pop, the stock, trading around $113, would still need to climb about 36% to reach its 52-week high of $153.86. ARK discloses its trades daily but doesn't explain the reasoning behind them, so Wood hasn't said what changed her mind.
Event contracts outpace crypto trading
The company published its August operating data two days after the second ARK purchase. In the second quarter, event contracts generated $156 million in revenue, up more than tenfold year over year. That was more than the $100 million Robinhood earned from crypto trading, a line whose revenue fell 38% in the period.
Customers traded 4.7 billion event contracts in August, 15 times the year-ago figure. That volume was 23% less than July's 6.1 billion. July's total had itself fallen 5% from June.
Assets and margin borrowing both climb
Robinhood ended August with $384 billion in total platform assets, up 8% from July and 26% year over year. Net deposits added $4 billion in the month and about $74 billion over the trailing 12 months. That growth came even after total platform assets had fallen 4% in July, to $355 billion, before the August rebound. Funded customers reached 28.6 million, up about 1.9 million over the past year.
Customers also borrowed more against their portfolios. Margin balances ended August at $21.5 billion, up 4% from July and 72% over the past year. The book had already more than doubled over the 12 months through June, to $21.6 billion.
Not a clear buy, even after the growth
Motley Fool analyst Daniel Sparks called Robinhood stock a hold rather than a buy. At about 39 times projected 2027 earnings, he said, shares already assume years of strong growth from the same business lines.
Source: Motley Fool
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