ARK Invest Ramps Up Robinhood Bets With Biggest Purchase in Half a Year After Stock Rout

Cathie Wood’s ARK Invest acquired approximately $9.1 million worth of Robinhood Markets (HOOD) shares on Wednesday, recording its biggest purchase of the stock in six months. The firm’s previous major acquisition took place on April 29, when it bought roughly $39 million in shares.

Data from ARK’s trading desk showed that the investment involved 99,418 shares spread across three exchange-traded funds (ETFs). It was the firm’s first purchase of Robinhood stock since September 8.

The shares were added to the ARK Innovation ETF (ARKK), the ARK Next Generation Internet ETF (ARKW), and the ARK Blockchain & Fintech Innovation ETF (ARKF).

Using Robinhood’s Wednesday closing price of $91.43, the transaction was worth about $9.1 million. However, HOOD shares declined 3.3% during the session, extending their losses over the past month to more than 23%.

The purchase marked a change in ARK’s recent approach to the stock. Between October 6 and October 9, the firm sold approximately $47.5 million worth of Robinhood shares while the stock closed between $107 and $112. Wednesday’s acquisition signaled renewed buying after those sales.

ARK’s move followed Robinhood’s third-quarter earnings release, which revealed a substantial slowdown in its cryptocurrency business. Crypto transaction revenue plunged 55% year over year to $120 million, while crypto trading volume dropped 38% to $50 billion.

Despite weaker crypto activity, growth in other business segments helped Robinhood achieve record quarterly revenue of $1.42 billion, up 12% from a year earlier.

Prediction markets contributed $173 million in revenue, more than six times the previous year’s figure and more than the company generated from crypto trading. Meanwhile, options revenue climbed 31% to $399 million.

Nevertheless, Robinhood’s results failed to meet analyst expectations. Revenue came in slightly below forecasts, while earnings per share reached $0.51, missing the consensus estimate of $0.55. Net income also decreased 14% to $476 million.

The downward momentum continued in premarket trading, with Robinhood shares falling an additional 1.88% to $89.70.