Robinhood Shares Plummet 10% Amid Crypto Selloff

Robinhood Markets saw its shares fall by 10% today, a decline primarily driven by a cryptocurrency market selloff. This broad market downturn particularly affected riskier stocks, with SoFi Technologies also dropping 8%. Bitcoin's significant tumble below $76,000 contributed to the market's unease.

While major payment companies like PayPal and Block experienced smaller declines of 2% and 4% respectively, Robinhood's steeper drop is attributed to its substantial reliance on trading revenue, which constituted 61% of its total revenue in the third quarter, with crypto revenue alone falling 55% to $120 million.

Despite the current market pressures, analysts maintain a positive outlook. They forecast Robinhood's normalized EPS to grow from $2.42 in 2026 to $4.37 in 2028. The stock is currently trading at approximately 24 times forward earnings, a notable decrease from its three-year average of 36x.

Other fintech companies were also affected; SoFi's stock drop is seen as a case of guilt by association, as its revenue is more dependent on lending than cryptocurrency. PayPal and Block, which generate most of their revenue from payments and lending, demonstrated more resilience.

Looking ahead, the fourth-quarter report is expected to reflect further cooling of crypto trading if Bitcoin continues to slide. The upcoming Anthropic IPO, which Robinhood plans to offer its customers before Thanksgiving, presents another point of interest for investors.