Investors anticipate a market rally in December and January. This news article explores Robinhood as a potential investment opportunity for the January effect, highlighting its recent performance and growth.
As 2024 concludes, investors await the Santa Claus rally lifting stocks in the last week of December and the January effect to kick in the following month. The January effect occurs when investors buy back into the market after taking their tax losses and selling their underperforming stocks to offset capital gains from cashing in on their winners. The net effect can be a sustained market rally throughout January. However, history is no guarantee of future results.
Nonetheless, here are two financial technology stocks in the computer and technology sector to buy now for a potential January effect next month. One such stock is Robinhood. Its shares are up 215% as of Dec. 13, 2024, driven by higher trading volumes and the rise of bitcoin. The company also added events contract trading for the 2024 Presidential election, where users could bet on the winner of the election for the first time on a brokerage app. Parlaying on the wild success of the events contract, CEO Vlad Tenev suggested that the fintech may look to expand into sports betting. This sent shares of digital sportsbooks like lower on concerns of losing market share. However, betting wouldn’t be as intricate as sportsbooks; instead, it would offer simple event contracts similar to presidential election event contracts.Robinhood reported its third-quarter 2024 EPS of 17 cents, missing analyst estimates by a penny. Revenues surged 36.4% YoY to $637 million, falling short of the $660.53 million consensus estimates. Its Assets Under Custody (AUC) rose 76% YoY to $152.2 billion, driven by net deposits and appreciating equity and crypto valuations. Net deposits rose 29% relative to AUC to $10 billion. Average revenue per user (ARPU) surged 36% YoY to $105, which indicates more trading activity with its customers. Robinhood Gold subscribers increased 65% YoY to 860,000. Monthly active users (MAUs) rose 7% YoY to 11 million.In November, Robinhood saw equity notional trading volumes surge 178.1% YoY to $147.1 billion
FINTECH STOCK MARKET JANUARY EFFECT ROBINHOOD INVESTMENT
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