Cathie Wood Cuts Robinhood Holdings—Follow Her Lead or Stay Put?

Core Viewpoint - The recent selling of Robinhood Markets Inc. stock by Cathie Wood from ARK Invest has raised concerns among investors, despite the company's strong growth metrics and potential for future gains [1][2]. Group 1: Company Performance - Robinhood reported a record revenue of $682 million, marking a 40% increase year-over-year [3]. - The company achieved a high operating margin of 27.8% this quarter, resulting in a net income growth from $25 million to $188 million, a rise of 652% [3]. - Earnings per share (EPS) increased from $0.03 to $0.21 in the same period [3]. Group 2: Customer and Asset Growth - Funded customers rose to 24.3 million, an increase of one million year-over-year and 60,000 in the past month [4]. - Assets under custody increased to $143.6 billion, up 60% year-over-year, driven by $37.5 billion in deposits [4]. - Interest revenues rose to $539 million, a 22% increase from $442 million the previous year [4]. Group 3: Market Sentiment and Analyst Ratings - Despite Cathie Wood's selling of $5.7 million worth of Robinhood stock, analysts at Bank of America reiterated a Buy rating with a price target of $32, indicating a 20% upside potential [6]. - Renaissance Technologies increased their holdings in Robinhood by 37.7%, bringing their net position to $173.8 million [6]. - The stock currently has a "Hold" rating among analysts, with some suggesting that other stocks may present better buying opportunities [7].