(Reuters) – Shares of Robinhood Markets rose 15% on Wednesday, a day after the commission-free brokerage announced job cuts to weather the downturn in the cryptocurrency markets and posted a smaller-than-expected quarterly loss.
The Menlo Park, California-based company saw revenue fall 44% in the second quarter ended June 30 as trading volumes eased from last year’s frenetic pace when retail investors used its application to pump money into so-called ‘meme stocks’.
The brokerage said it will slash its total headcount by 23% in the backdrop of a looming recession, rising rates and decades-high inflation.
“We believe these cost reductions will likely drive the company to profitability in the near term and could drive shares higher,” Goldman Sachs analysts wrote in a note.
In April, Robinhood had slashed 9% of its total workforce, citing the need to manage expenses.
(Reporting by Manya Saini in Bengaluru; Editing by Shinjini Ganguli)
