Why Robinhood Stock Is Soaring Today
Key Points
Robinhood and Susquehanna International Group will own a combined 90% stake in LedgerX, a derivatives exchange.
The acquisition is part of Robinhood's push to compete in prediction markets, an area seeing explosive growth.
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Shares of Robinhood Markets (NASDAQ: HOOD) are jumping on Monday, up 10.7% as of 2:36 p.m. ET. The rise comes as the S&P 500 and the Nasdaq Composite gained 0.9% and 0.9%, respectively.
The online trading platform announced today that it reached a deal with Miami International Holdings to take control of LedgerX, once part of the infamous crypto exchange, FTX.
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Robinhood wants a piece of the prediction pie
The three-party deal will see Robinhood and Susquehanna International Group own a combined 90% stake in LedgerX, with Miami International retaining a 10% stake, and is expected to close in the first quarter of 2026.
Image source: Getty Images.
The move is part of Robinhood's push into prediction markets, where investors can trade contracts that predict the outcome of future, measurable events like presidential elections or whether the Federal Reserve will cut interest rates. These markets have exploded in popularity in recent years and have begun to draw major investment from established players in traditional markets. Just last month, Intercontinental Exchange, the owner of the New York Stock Exchange, invested $2 billion in Polymarket, the world's largest prediction market.
Robinhood is pricey
Robinhood has a lot of potential and room to grow its bottom line, but its stock has exploded in the last two years, and I think it has run too far.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool recommends Intercontinental Exchange. The Motley Fool has a disclosure policy.
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