Robinhood experienced a considerable stock decline of 12.4% this week, marked by a 10.1% drop on Thursday and a marginal recovery of 1% on Friday. The month of November has alone wiped out 27% of the platform's market value.
The company's shares have been severely impacted as the energetic trading in bitcoin and AI stocks, which previously propelled Robinhood's growth, has seen a decline in momentum.
This recent downturn highlights a significant shift in the risk-intensive investment activities on which Robinhood depends. The company's primary operations are heavily linked to retail investors diving into speculative areas of the market, notably cryptocurrencies and popular AI-related stocks.
Earlier this year, these investments contributed to a resurgence in Robinhood's revenue and user engagement, following new highs in bitcoin prices and a surge in stocks associated with artificial intelligence. However, the recent downturn in cryptocurrency values and high-growth tech stocks has underscored Robinhood's vulnerability to changes in market sentiment.
This week alone, bitcoin has decreased approximately 12%, reaching a new low of $80,548.09 on Friday, a level unseen since April. Similarly, shares of AI technology leader Nvidia have dropped by 6% this week.