Robinhood Market Inc.
HOOD 7.57%
said Wednesday that it is adding equity lending to its trading app, the latest in a series of products aimed at boosting its business.
Customers who allow stock lending allow Robinhood to lend out any fully paid-up stock in their portfolio and will be paid upon match to the borrower. The brokerage firm has a dashboard for opting into the program and tracking earnings.
“Robinhood does the job of finding borrowers and managing deals while clients can add a potential source of passive recurring income to their portfolios,” said Steve Quirk, director of brokerages at Robinhood. .
To qualify, the outfit must have an account worth $5,000 or more, an income of $25,000, and some trading experience. The company says the program will be fully rolled out by the end of May.
Securities lending is on the rise. Global equity lenders had $828 million in revenue last month, up 20% from April 2021, according to research firm DataLend.
Robinhood competes in a crowded market with established multiplayer focusing on the same customer. Other brokerage firms, including Fidelity Investments,
TD Ameritrade and Webull, also offer securities lending to individual investors.
Robinhood sucked the blood of active investors, and revenue fell 43% in the first quarter, the fifth consecutive quarter decline. Last week, the brokerage said it had laid off 9% of its workforce.
The company has been focusing on introducing new products — including crypto wallets and automated investment services — to diversify revenue streams and recruit new investors.
Brokerage business rose to new heights in the early days of the Covid-19 pandemic as individual investors flooded the rising market, making a name for itself with its sleek interface and zero-fee trading. .
It sends Customers place orders for high-speed transaction companies exchange for cash is in fact called command line payment. Fewer investors trade means Robinhood’s transaction-based revenue halved in the first quarter.
Write to Jenna Telesca at [email protected]
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