What Happened?
Shares of financial services company Robinhood (NASDAQ:HOOD) fell 1.6% in the afternoon session after the U.S. announced potential tariffs on several European countries.
The sell-off was a reaction to news that the White House planned to impose a 10% tariff on imports from eight European nations, including France, Germany, and the United Kingdom, starting February 1.
Reports indicated the tariffs were intended to pressure Denmark over the potential sale of Greenland to the U.S. and could rise to 25% if a deal was not reached. The announcement caused a significant downturn in U.S. stocks, with the S&P 500 and Dow Jones falling more than 1.4% as investors returned from a holiday weekend and reacted to the heightened trade uncertainty. The downturn was further exacerbated by a spike in Treasury yields. Higher rates particularly hurt growth stocks such as tech names since investors must discount financials further out in the future back to the present.
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What Is The Market Telling Us
Robinhood’s shares are extremely volatile and have had 56 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago when the stock gained 15.3% on the news that the company reported strong fourth quarter 2024 results, which blew past analysts' revenue, EPS, and EBITDA expectations.
Specifically, cryptocurrency trading revenues soared by 700%+ year-on-year while equities and options increased by 144% and 83%, respectively - note that crypto and options trading are more profitable business lines than equities due to the wider spreads. Margins expanded significantly, with net income jumping over tenfold to $916 million, while earnings per share more than tripled from the previous year, benefiting from higher trading volumes. Looking ahead, management sees continued momentum, with a focus on expanding its crypto offerings and international reach, particularly in the Asia-Pacific region. Zooming out, we think this was a good quarter with some key areas of upside.
Robinhood is down 7.1% since the beginning of the year, and at $107.00 per share, it is trading 29.8% below its 52-week high of $152.46 from October 2025. Investors who bought $1,000 worth of Robinhood’s shares at the IPO in July 2021 would now be looking at an investment worth $3,073.
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