A Robinhood Insider Just Bought a Boatload of Shares of the Beaten-Down Stock. Should Investors Follow Suit?
Key Points
Robinhood stock has had a tough year due to declining cryptocurrency revenue.
The company, however, has some potential growth catalysts.
- 10 stocks we like better than Robinhood Markets ›
It's been a tough year for Robinhood Markets (NASDAQ: HOOD) stock, with shares down about 25% year to date. However, one insider has seen an opportunity in the weakness. Director Micky Malka bought a boatload of shares through his Ribbit Capital fund.
Malka's fund focuses on fintech investments, and Robinhood is the fund's third-largest investment behind Nu Holdings and Figure Technology. He also sits on MercadoLibre's board. In late May and early June, he bought 23.6 million shares, worth around $35 million, through the online broker. Notably, the buys were a reversal of sentiment, as he was selling shares as recently as August 2025, when he sold shares at prices over $100.
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Should investors follow suit and buy Robinhood shares?
Robinhood's tough year can be directly tied to its cryptocurrency platform, which has seen revenue plunge amid weakness in the crypto market. Bitcoin is down around 30% in 2026 and off more than 40% over the past year, while Ethereum has fallen around 45% this year. Given these price declines and the big gains in artificial intelligence (AI) stocks, people have not been trading cryptocurrencies as they did in the past.
While crypto transactions have flowed into equities, Robinhood makes a much larger per-trade profit from crypto trading than from stock trading, given the wider buy-and-sell spread in crypto. This dynamic was evident in Q1, when its crypto revenue plunged 47% year over year to $134 million, while its equity revenue surged 46% to $82 million. Despite its volatility, Robinhood is looking to drive crypto revenue by expanding into new countries, including Canada.
The company also has a couple of other catalysts. It is seeing strong momentum in the predictions market, where revenue has been skyrocketing. It just lowered its fee structure ahead of the FIFA World Cup, which is looking to be a big growth driver. Last quarter, its other revenue, where its prediction solution is currently classified, jumped 320% to $147 million.
The company is also investing heavily in so-called "Trump Accounts," where eligible children born between 2025 and 2028 can receive an initial $1,000 government contribution. Up to $5,000 can then be collectively contributed to the account each year, and contributions are automatically invested in low-cost index funds. Robinhood launched an app specifically for the accounts in late May.
The stock currently trades at a forward P/E of 30 times 2027 analyst estimates. I think that is a reasonable valuation where investors can consider taking a small position in the stock.
Should you buy stock in Robinhood Markets right now?
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Geoffrey Seiler has positions in MercadoLibre. The Motley Fool has positions in and recommends Bitcoin, Ethereum, MercadoLibre, and Nu Holdings. The Motley Fool has a disclosure policy.
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