Robinhood Stock Plunge Steepens After Goldman Warns Investors Should Sell Amid ‘Depressed’ User Growth

Robinhood Stock Plunge Steepens After Goldman Warns Investors Should Sell Amid ‘Depressed’ User Growth

Share to Linkedin Shares of Robinhood plummeted Friday after an analyst at Goldman Sachs, one of the investment banks underwriting the online brokerage's initial public offering last year, issued a bearish rating for the stock, extending a months-long decline that has wiped nearly $50 billion in value. Robinhood's user growth, which exploded early in the pandemic, has "remained depressed" amid a tepid ... [+] start to trading this year, Goldman said Friday. Robinhood stock fell nearly 7% Friday morning to about $11. 25, the stock's lowest level in nearly a month and about 84% below an all-time closing high last August. Triggering the morning plunge, Goldman analyst Will Nance issued a sell rating for the stock Friday morning, saying a "limited path to near term profitability," weak account growth and softening engagement from less-sophisticated investors will likely pose headwinds for the stock over the next 12 months. In the short term, Robinhood's user growth, which exploded early in the pandemic, has "remained depressed" amid a tepid start to trading this year, Nance said, citing app download data and saying accelerated growth will be key for the stock to move higher. Other experts have also soured on the stock: Deutsche Bank