We Need to Talk About Robinhood's Stock-Based Compensation

Robinhood Markets (NASDAQ: HOOD) has burned a lot of investors since its public debut last July. The online brokerage went public at $38 per share and rose to a peak of $85 a month later. But now, it trades at about $10 a share.

Robinhood lost its luster on Wall Street as its growth in monthly active users and revenue stalled out and its margins crumbled. Rising interest rates also drove many investors away from the riskier "meme stocks" and cryptocurrencies that had driven much of its pandemic-era growth, and that shifting sentiment also made unprofitable companies like Robinhood look a lot less attractive.

I covered a lot of Robinhood's problems in an article published in early May, and I concluded that it was still too risky to own in a growling bear market. But this time, I want to dive deeper into its ridiculously high stock-based compensation (SBC) expenses -- and why they'll prevent it from generating any near-term profits.

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Source Fool.com