Key Takeaways:
Cathie Wood’s ARK Invest bought roughly $39.4 million of Robinhood Markets (HOOD) shares on April 29, using the trading platform’s post-earnings stock slide to increase its position while trimming exposure to its spot Bitcoin ETF.
The contrarian move is shared by some analysts who see improving momentum. “Preliminary April equity/option trading volumes are tracking toward the highest monthly level this year,” Cantor Fitzgerald said while reiterating its ‘Overweight’ rating and $110 price target.
ARK Invest purchased 553,892 HOOD shares across its Innovation (ARKK), Next Generation Internet (ARKW), and Fintech Innovation (ARKF) ETFs. The buying followed Robinhood’s report of a 47% year-over-year drop in first-quarter crypto revenue, which sent the stock down nearly 12%. On the same day, ARK sold 243,147 shares of its ARK 21Shares Bitcoin ETF (ARKB) for about $6.1 million.
The rebalancing highlights ARK’s strategy of rotating between direct crypto exposure and crypto-adjacent equities, rather than a directional call on Bitcoin itself. The action suggests ARK sees more upside in Robinhood’s currently depressed valuation than in holding the Bitcoin ETF, a view that hinges on the trading platform’s ability to rebound in the second quarter.
ARK’s purchase aligns with a wave of Wall Street analysts who are looking past Robinhood’s first-quarter miss, which was driven primarily by weaker crypto trading. Firms like Compass Point and Bernstein are maintaining ‘Buy’ or ‘Outperform’ ratings, citing data that shows a rebound in equity and options trading in April.
However, not all analysts are convinced. Keefe, Bruyette & Woods (KBW) cut its price target on Robinhood to $65 from $75, warning that declining transaction fees on both crypto and options could pressure earnings through 2028.
Bullish investors are now looking toward new revenue streams to justify their position. Robinhood’s planned prediction markets platform, Rothera, is seen by analysts like Cantor as a potential driver of future revenue and margin expansion.
Robinhood stock was up about 3% on Thursday but remains down about 37% year-to-date. Its crypto-focused peer, Coinbase (COIN), rose a similar 3% on the day and is down about 19% for the year.
This article is for informational purposes only and does not constitute investment advice.
