Stock price down nearly 40% this year, Robinhood (HOOD.US) spends $1.5 billion on buyback to "save itself"

Robinhood Markets Inc. (HOOD.US), the online retail brokerage in the United States, announced a new stock buyback program authorizing the company to repurchase up to $1.5 billion worth of shares amid a continued decline in stock prices. After more than doubling in value last year, the company, headquartered in Menlo Park, California, has seen its stock price decline by 39% since early 2026, providing a window for buybacks.

Robinhood Chief Financial Officer Shiff Virmma stated in a Tuesday release, “This authorization reflects the confidence of our management team and board of directors that we have the ability to continue delivering innovative products to our customers, create value for shareholders, and achieve long-term capital returns.”

Virmma, who took on the CFO role in February this year when Robinhood’s stock was dragged down by a crash in the cryptocurrency market, said the buyback plan has no set expiration date and is expected to be executed over approximately three years.

On February 11, Robinhood Markets Inc. released its Q4 earnings report. Despite record overall revenue, the company’s quarterly performance fell short of Wall Street expectations due to a significant decline in cryptocurrency trading income, leading to a sharp drop in stock price in after-hours trading. However, the company’s emerging prediction market business showed remarkable growth potential, providing a bright spot amid the disappointing earnings.

In an interview, new CFO Shiff Virmma discussed the company’s cryptocurrency trading pricing structure: “For high-frequency trading clients, we use a lower-tier fee structure.”

“He added, ‘Active traders still trade frequently, but they qualify for the lowest rates. As a result, the actual rebate rates we receive are slightly below market expectations.’”

Amid challenges in traditional trading, Robinhood’s prediction market business became the biggest growth surprise in the earnings report. This business allows users to bet on the outcomes of various events, including sports.

Robinhood stated on Tuesday that last year, more than 12 billion event contracts were traded on its platform. The CEO told analysts during a conference call that this was the company’s fastest-growing business in history.