The champagne corks must have been popping almost daily at online financial services provider Robinhood in recent weeks. The company, which was only founded in 2013 and went public in 2021, has more than doubled its market value since mid-April. The share even managed to break above the USD 100 mark in the meantime. However, the three-digit price mark was the end of the road for the time being and the share began to consolidate. This was triggered not only by the psychologically important hurdle, but also by negative reports at almost the same time. On the one hand, the Florida Attorney General's Office launched a comprehensive investigation into Robinhood for alleged deception about the actual costs of trading cryptocurrencies, while on the other, the regulatory authority in Europe intervened with regard to new equity tokens from non-listed companies such as OpenAI and SpaceX.
First, let's take a look at the fintech company's business development: fueled by the coronavirus pandemic, the company named after the literary hero character has been a real success story in recent years. From 10 million users in 2019, the number of investors has doubled within two years and has now reached a level of more than 25 million: Revenue increased tenfold in this period from USD 273 million to USD 2.95 billion, with the earnings side turning positive. Six years ago, losses in the triple-digit millions were still piling up, but last year the company posted a healthy profit of USD 1.4 billion. The start to 2025 was also successful. Sales increased by 50% and profits more than doubled. "We are also pleased with the strong customer retention at the beginning of the second quarter," explains CFO Jason Warnick and continues: "In addition, we continue to return capital to shareholders and have increased our share buyback authorization by USD 500 million to USD 1.5 billion."
With its affordable and innovative trading products, Robinhood has its finger on the pulse of the times. The platform now not only enables trading in shares, ETFs and cryptocurrencies, but tokenized shares and ETFs have also recently been added to the offering. These are digital versions of company shares that enable private investors to participate in the success of unlisted companies. However, this is currently causing headwinds. OpenAI has recently publicly stated that it has not reached an agreement with Robinhood and that the "OpenAI tokens" are not shares and no transfer of real shares in the AI company is possible.
At the end of June, the company also launched these trading products in Europe and launched more than 200 tokenized US shares and ETFs in the EU. Now, however, the company is having to deal with the supervisory authorities. The responsible Bank of Lithuania has launched an investigation into the tokenized equity products following public concerns raised by OpenAI. Robinhood, on the other hand, explains that its tokens "offer retail investors indirect exposure to private markets" and thus democratize investment opportunities that were previously difficult to access. The extent to which the Lithuanian central bank responsible for this will be satisfied with this will be decided in the coming days or weeks. Meanwhile, Robinhood has big plans for its digital solutions. Among other things, the company is planning its own layer 2 blockchain, perpetual futures, i.e. futures contracts without an expiration date, and crypto staking.
Investors who want to take advantage of the neobroker's potential but also want to sleep well in volatile times may be well advised to invest in Leonteq's new soft callable barrier reverse convertibles. These not only offer double-digit coupons, but thanks to a low safety threshold, the capital invested is also well protected even if the Robinhood share comes under pressure in the short term. The CHF-denominated variant has a coupon of 16.20% p.a., while the USD-denominated paper even offers a whopping 21.60% p.a.. In addition, both products have a solid risk buffer of 50%, which protects the nominal value during the maximum one-year term.
In order to receive the high coupons pro rata, the Robinhood share must be quoted above the coupon trigger level of 50% of the starting level on the quarterly observation dates. If the interest payment is not made on a key date, it is not lost at the same time. Due to the memory mechanism, the redemption can be made up for if Robinhood is quoted above the corresponding threshold again on one of the following observation dates. The term can be shortened due to the soft callable function. After six months, the issuer has the right to redeem both BRCs early at 100% on the observation dates.
More risk-averse investors can also use leverage products with the innovative FinTech. Leonteq's product range includes a total of 19 mini-futures and warrants with knock-out, which enable disproportionate participation in Robinhood's price movements. Both long and short positions can be chosen.
We look forward to answering all of your questions about our products and how they are traded. Please don't hesitate to get in touch! Phone: 058 800 11 11, email info@leonteq.com or contact us here.