Robinhood Rallies 26% on Tokenized Stock Launch, Faces EU Backlash
Robinhood Markets ($HOOD) soared nearly 26% over the past month, propelled by bold moves into blockchain-based tokenized equities and crypto infrastructure.
The company recently unveiled a new platform in the European Union that allows users to trade over 200 tokenized U.S. equities and ETFs. Built on Arbitrum, these products offer synthetic exposure—not ownership rights—to major public and private firms, including OpenAI and SpaceX.
While the move has excited crypto-native investors and pushed Robinhood stock as high as $95, regulators in the EU have raised red flags. The Bank of Lithuania is now investigating the legality and disclosure standards of Robinhood’s tokenized offerings. OpenAI also distanced itself from the tokens, warning investors of potential misinformation. Elon Musk added fuel to the fire by publicly calling OpenAI’s equity “fake.”
The company insists the tokens are merely derivatives tracking market prices and aren’t tied to real equity. Still, critics argue that retail investors may be misled by unclear language and a lack of investor protections—especially given the tokens’ unregistered nature and lack of governance rights.
On the business side, Robinhood’s aggressive crypto expansion continues. It finalized its acquisition of Bitstamp, gaining access to over 50 global licenses. This positions Robinhood to offer institutional services like staking, lending, and high-volume trading tools.
Robinhood’s financials show impressive growth: revenue jumped 60% to $3.3 billion in the past year, with quarterly growth at 50%. Its operating income reached $1.3 billion, and the net margin sits at a strong 48.8%.
However, some analysts remain cautious. With a lofty price-to-sales ratio of 24.1 and P/E of 49.5—both far above market averages—Robinhood’s stock could be vulnerable if sentiment shifts.
Nonetheless, its hybrid model of traditional trading and blockchain innovation is attracting both investors and institutions bullish on the future of tokenized finance.
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