Robinhood's Stock Soars to Two-year Peak, Spurred by Credit Card Debut

Robinhood's stock drive by its new credit card launch drives shares to levels not seen in over two years, attracting retail investors.

On a buoyant Wednesday, Robinhood Markets saw its stock ascend to a zenith not reached in over two years, propelled by the unveiling of its new credit card, as the company strategizes to diversify its offerings and lessen its dependency on the volatile trading revenues.

Stationed in Menlo Park, California, Robinhood’s stock uplifted by 4% in the afternoon trade session, reaching a peak last witnessed in December 2021.

The company, cherished by retail investors, announced the introduction of a credit card for its ‘Gold’ tier clients, featuring no annual or foreign transaction fees and providing 3% cashback as reward points on purchases.

Michael Ashley Schulman, a partner and CIO at Running Point Capital Advisors, commented on the integration of the credit card with Robinhood’s Gold program, forecasting a positive impact on revenue due to the lucrative nature of options trading and margin usage associated with it.

Robinhood became a notable name during the 2021 retail trading boom, catalyzed by individual investors flocking to its commission-free platform, igniting rallies in various “meme stocks” amid the pandemic-induced lockdowns.

Earlier in February, Robinhood outlined its objective to widen profit margins while pursuing ‘profitable growth’ throughout the year, following an unexpected quarterly profit revelation.

The firm has seen a favorable uptick in engagement from retail traders, its primary clientele, buoyed by the vibrant performance of both capital and crypto markets this year.

This revitalized trading enthusiasm, coupled with a sharpened focus on financial health, has led to a significant uptick in Robinhood’s stock, which has escalated over 50% year-to-date.

Schulman noted Robinhood’s ongoing efforts to amplify customer excitement, foster interaction, and attract seasoned individual investors.

Market data from Ortex indicates that short interest in Robinhood’s stock stands at 5.88% of the free float, with short-sellers incurring paper losses exceeding $200 million since the onset of 2024, up to the last trading session.

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