Alphabet’s Strategic Shift: Google’s Parent Dissolves Stake in Robinhood Startup

The parent company of Google, Alphabet’s Strategic Shift, has sold all of its stock in the trading app startup Robinhood. The IT giant announced in a recent statement with the Securities and Exchange Commission (SEC) that it has liquidated its ownership in Robinhood after selling about 90% of its interest in the company in August. Moreover, Alphabet sold up its interests in Lyft, a ride-sharing service.

First reporting on the sale on Monday, November 13, Reuters also mentioned that Alphabet had invested in Robinhood before the latter company’s IPO, but after the platform had drawn interest from individual traders.

The number of monthly active users (MAUs) that the corporation has seen declines; in September, it was revealed that MAUs had dropped from 13.3 million in 2022 to 10.6 million in August.

Robinhood said last week that its cryptocurrency trading revenues for the quarter ended September 30, compared to the same period last year, had decreased by 55%.

Given the rising use of cryptocurrencies and investor interest in cryptocurrency trading, PYMNTS stated that “this decline in revenues is significant.”

Nevertheless, the company’s overall net revenues for the third quarter of 2023 increased to $467 million, a 29% YoY increase. Other factors, such as net interest revenues, which increased by 96% annually to $251 million as a result of the expansion of interest-earning assets and higher short-term interest rates, can be attributed to this increase in net revenues.

However, PYMNTS stated that transaction-based revenues, which include earnings from stocks, options, and cryptocurrencies, fell by 11% year over year to $185 million. Particularly in this category, revenues for cryptocurrencies fell by 55% during the quarter, coming to $23 million. The total drop in transaction-based revenues is influenced by the dip in crypto trading profits.

The Reuters piece claims that although revenues rose, they fell short of Wall Street’s expectations.

The claim that Alphabet was in talks to invest hundreds of millions of dollars in artificial intelligence (AI) firm Character preceded the news of the company’s sale.AI, which creates chatbots with a focus on characters that are mostly appealing to younger consumers.