Why Robinhood Stock Was Scorching Hot Last Month

Key Points

• Some companies wilt in the early summer heat when June rolls along. This one certainly did not.

• Management was busy adding features to its platform and bolstering its crypto offerings, among other activities.

June is a sluggish month for some, but it sure was active for next-generation brokerage Robinhood Markets (NASDAQ: HOOD). The company launched a set of new features on its platform, closed an acquisition, and published monthly operating metrics that pleased the market. That might be an understatement; the stock rose by over 41% in value across June.

New features and a new asset

Not every development was a boon for Robinhood, however. Speculation was rife that the company's stock would be added to the benchmark S&P 500 index as part of the gauge's quarterly rebalancing. Those hopes were dashed, however, when S&P Dow Jones Indices announced that it would leave the index unchanged. Investors sold out of Robinhood on the news.

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The S&P 500 disappointment came after a bright spot for the company, namely its monthly operating data release.

Robinhood divulged that in May, total assets on its platform were up a beefy 89% year over year to $255 billion. Meanwhile, overall trading volumes also rose briskly, with volumes for stocks more than doubling to over $180 billion, options contracts advancing 36% to nearly the same amount, and a 65% increase in crypto activity (to just under $12 billion).

The new features announced by Robinhood in mid-June also piqued the market's attention. While most of these were fairly minor, several have the potential to make the company's trading portal stickier. One is stock "tokens," or equity derivatives that reside on a blockchain, that will allow European users to trade U.S. titles. Another is its artificial intelligence (AI)-enhanced Cortex Digests analytical tool.

On the subject of blockchain technology, Robinhood completed a big move in that space. It announced that it had closed its buyout of global cryptocurrency exchange operator Bitstamp. In the press release trumpeting this, the company said that Bitstamp has more than 50 active licenses and registrations around the world, as well as customers located in the U.S., U.K., European Union, and Asia. In the press release, the company said that owning Bitstamp "significantly enhances Robinhood's Crypto product for customers across the globe."

Busy in the best way

So, June was a whirlwind, but in a good way for Robinhood. Some investors might not be too excited about the company doubling down in the volatile world of crypto, but as a trading platform -- essentially an intermediary -- it shouldn't be directly affected by the asset class's famous volatility.

Outside of that, those metrics sure looked good, and overall, management seems to be positioning Robinhood in front of some juicy growth opportunities. I'd be bullish on this company's future.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.