Online trading platform Robinhood Markets (NASDAQ:HOOD) is rapidly learning a key point: when all you do is trade, offering more things in which to trade becomes a kind of diversification. And investors do prefer diversification; they prefer it, in fact, to such a degree that Robinhood added an extra 3.5% to its value in Friday afternoon’s trading.
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Robinhood kicked off the reasons for its latest gains via a quiet deal with the U.S. Marshal Service. It bought back a massive slug of shares—55.3 million—formerly owned by Sam Bankman-Fried of FTX infamy. The U.S. took custody of the shares following Bankman-Fried’s arrest, and now, Robinhood bought them back.
A stock buyback is generally a good move for stocks, but that’s not all Robinhood’s been up to of late. It’s been expanding outward into cryptocurrency as well. Over the next few weeks, Robinhood will be bringing the DeFi platform to its operations, giving users access to as many as 200 tokens. Robinhood also recently added access to Bitcoin (BTC-USD) and Dogecoin (DOGE-USD), and Ethereum (ETH-USD) swaps aren’t far behind either. All of this is just improving value for the end user; the more things users can trade in, the less likely they are to go to other platforms to get access to what they want to buy and sell.
Analysts remain largely split on Robinhood’s overall future, however. With three Buy ratings, five Holds, and three Sells, Robinhood stock has a consensus rating of Hold. Further, with an average price target of $13.10, Robinhood stock boasts 16.24% upside potential.
