Robinhood, the popular brokerage platform, experienced a notable 12.4% decrease in stock value this week. The stock dropped sharply by 10.1% on Thursday and slightly rebounded by 1% on Friday. Overall, November alone has wiped out 27% of its market value.
The weekly loss faced by Robinhood comes as the surging trades in bitcoin and AI stocks, which previously fueled the platform's expansion, have lost momentum.
The recent downturn showcases a significant shift in the high-risk investment activities that Robinhood heavily depends on. The company's primary operations are intertwined with retail investors venturing into speculative areas of the market, particularly cryptocurrencies and in-demand artificial intelligence stocks.
Earlier this year, such trades significantly boosted Robinhood's revenue and user activity when bitcoin reached new peaks and anything linked to artificial intelligence thrived. However, the current decline in cryptocurrencies and prominent high-growth tech stocks highlights Robinhood's vulnerability to changes in market sentiment.
This week alone, bitcoin's value has dropped approximately 12%, reaching a new low of $80,548.09 on Friday, marking its lowest point since April. Additionally, shares of Nvidia, a leader in AI technology, have decreased by 6% this week.