Investing platform Robinhood saw its shares spike yesterday following the announcement of extended trading hours for its app customers.
Stock trading app Robinhood (NASDAQ: HOOD) saw a huge spike in its stock price yesterday following the announcement of extended trading hours on its platform. Users will now be able to avail of four extra hours — two in the morning and two in the evening. The news saw shares in the firm pop by over 24%.
Why is Robinhood stock up?
A slowdown in trading volume has been one of the many reasons behind Robinhood’s struggles so far this year. With the stock down over 13% on the year-to-date even after this significant jump, it’s clear that changes had to be made to entice more users to engage with the platform.
In a blog post released by the company announcing the news, it was stated that,
“Our customers often tell us they’re working or preoccupied during regular market hours, limiting their ability to invest on their own schedule or evaluate and react to important market news. In fact, we’ve seen a community of Robinhood early birds and night owls who log in exclusively outside of regular market hours.”
If this truly is the case, an additional four hours of trading time outside of typical hours could be a huge boon to the company. Retail investors will now be able to trade from 7 AM to 8 PM Eastern Time. This puts Robinhood’s hours more in line with legacy brokers such as Charles Schwab or Fidelity.
Robinhood has also confirmed that its end goal is to eventually work towards offering 24/7 investing. This intermediate step could be extremely important in ascertaining whether or not there will be a true value in allocating time and effort to a 24-hour platform.
What does this mean for Robinhood investors?
For current shareholders, this move should be viewed positively. Robinhood’s stock is flagging, but this shows clear signs that the firm is willing to innovate in an attempt to turn its fortunes around. There’s still a considerable amount of work to be done, with the company over 55% down on the all-time high it experienced shortly after its July 2021 IPO.
While it’s unlikely that this move alone will continue to eat up some of those losses, it could provide the spark from which Robinhood will continue to grow out of. Moving its offerings further in line with other legacy competitors could help it attract new customers that previously shied away from the relatively limited offering put forward by Robinhood. Once customers are in, the app’s ease of use and user-friendliness could drive high retention rates.
Robinhood remains a stock to keep an eye on as it attempts to pivot away from the frenzy of 2021. The firm is not without its faults, but its mission to “democratize finance for all” is certainly admirable, and it has proven already that there is certainly a place in the market for apps of its kind.