In this article, we discuss 5 companies that recently announced layoffs and hiring freezes amid recession fears. If you want to see more stocks in this list, click These 10 Companies Recently Announced Layoffs, Hiring Freeze Amid Recession Fears.
5. Robinhood Markets, Inc. (NASDAQ:HOOD)
Number of Hedge Fund Holders: 19
Robinhood Markets, Inc. (NASDAQ:HOOD) operates a financial services platform in the United States, allowing users to invest in stocks, exchange traded funds, options, gold, and cryptocurrencies. The company announced at the end of April that it is laying off 9% of its full-time employees, which amounts to approximately 300 people. The stock has fallen about 52.5% year to date as of June 8, trading at a mere $9 compared to its peak at $85 per share after a July 2021 IPO.
The former tech unicorn has faced several internal struggles as well as the broader macro crunch. In November 2021, the company faced a data breach, which impacted its customers immensely. The company has grown massively since its IPO, and to handle the expanded operations, the headcount jumped from 700 to 3,800 employees between 2019 and 2021. Doing so duplicated many roles in the company, and employees had to be let go in order to maintain its balance sheet.
On May 13, Piper Sandler analyst Richard Repetto told investors that Robinhood Markets, Inc. (NASDAQ:HOOD) shares were up 24% as news broke that crypto exchange FTX founder Sam Bankman-Fried picked up a 7.6% stake. While it remains unclear what Bankman-Fried’s intentions are in purchasing the position, noted the analyst, he believes that Bankman-Fried’s reputation and knowledge of the crypto economy could benefit Robinhood Markets, Inc. (NASDAQ:HOOD). The analyst pointed out that Robinhood Markets, Inc. (NASDAQ:HOOD) has recently made a targeted plan to expand its crypto offering. He maintained a Neutral rating on the shares with an $11 price target.
According to Insider Monkey’s database, 19 hedge funds were bullish on Robinhood Markets, Inc. (NASDAQ:HOOD) at the end of Q1 2022, compared to 24 funds in the prior quarter. Cathie Wood’s ARK Investment Management held the biggest position in the company, comprising 30.35 million shares worth $410 million.
Here is what Claret Asset Management has to say about Robinhood Markets, Inc. (NASDAQ:HOOD) in its Q4 2021 investor letter:
“Robinhood went public at $38 a share at the end of July of this year. After a one day decline of 8%, it proceeded to rise to a peak of $85 in a matter of 4 days before settling down around $40 in September. Then, we found out that the company does not appear to understand the margin rules that apply to their client’s trades… and got fined by the Securities Exchange Commission. As of today, it is trading below $20, at 57 times earnings, approximately half of its IPO price. Caveat emptor… Buyer beware.”
