Robinhood Markets Announces $1B Share Repurchase Program, Company Stock Moves Up

The board of directors of Robinhood Markets, Inc. (NASDAQ: HOOD) has authorized a $1 billion share repurchase program, “demonstrating management and the board’s confidence in Robinhood’s financial strength and future growth prospects.”

Jason Warnick, Chief Financial Officer of Robinhood, said:

“As our business and cash flow have continued to grow, we’re excited to announce a $1 billion share repurchase program to return value to shareholders.” 

Management currently expects to “execute this program over a two to three year period starting in Q3 2024, depending on general business and market conditions, and alternative investment opportunities.”

Management also plans to “vary the pace of capital deployment depending on share price.”

Shares of Robinhood Markets surged around 4% in the extended session Tuesday following the online broker confirmed its board approved a $1 billion share-buyback program.

Robinhood’s management stated that the program doesn’t have an end date, however, it aims to have it over a period of 2-to-3 years, starting in the third quarter.

Robinhood recently reported Q1 results which were considerably above Wall Street’s expectations, noting it acquired business from brokerage competitors and made significant progress with paying subscribers.

Robinhood shares have surged about 60% during 2024, when compared with an advance of approximately 10% for the S&P 500 index SPX.

As covered recently, Robinhood is making a major shift in how we offer margin investing to better serve our customers on their financial journey. Robinhood notes in a blog post that it is pleased to launch what they claim to be “the lowest margin rates among brokerages, now offering rates ranging from 5.7% to 6.75%.”

Customers will now receive “a single low rate based on their total margin balance.”

Here are the rates customers will receive at Robinhood:

  • 6.75% for up to $50K
  • 6.55% starting at $50K and up to $100K
  • 6.25% starting at $100K and up to $1M
  • 6% starting at $1M and up to $10M
  • 5.95% starting at $10M and up to $50M
  • 5.7% starting at and above $50M

Steve Quirk, Chief Brokerage Officer at Robinhood, said:

“We’re always looking to upend the status quo on behalf of our customers. Whether someone has a balance of a few thousand dollars, or millions, they automatically have access to the lowest margin rates among leading brokerages with absolutely no haggling required.”

For the last 10+ years, they’ve grown up right alongside their customers, and as they expand their platform’s suite of products and services “to provide better tools for more advanced investors, it’s time to change the way we approach margin lending at Robinhood.”

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