Why Robinhood Markets, Inc. (HOOD) Crashed on Monday

We recently compiled a list of the 10 Firms Suffer Steep Downfall on Monday. In this article, we are going to take a look at where Robinhood Markets, Inc. (NASDAQ:HOOD) stands against the other stocks.

Ten companies kicked off Monday’s trading in a bloodbath, mirroring the broader market pessimism, with valuations slashed by double digits mostly due to investor caution brought about by key economic uncertainties.

Wall Street’s main indices all fell in the red, with the tech-heavy Nasdaq recording the steepest downfall with 4 percent.

The S&P 500 declined by 2.7 percent, while the Dow Jones dropped by 2.08 percent.

We have identified the 10 worst-performing companies on Monday and detailed the reasons behind their drop.

To come up with the list, we considered only the stocks with $2 billion in market capitalization and $5 million in trading volume.

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Robinhood Markets, Inc. (NASDAQ:HOOD)

Robinhood Markets, Inc. (NASDAQ:HOOD) fell by 19.79 percent on Monday to end at $35.63 apiece—a third consecutive day—as investors sold off positions to mitigate risks from economic uncertainties, coupled with news that it agreed to settle multiple investigations by the Financial Industry Regulatory Authority (FINRA).

On Friday, FINRA said that Robinhood Markets, Inc. (NASDAQ:HOOD) agreed to pay $29.75 million to settle penalties, of which $26 million will be paid as a civic penalty, while the remaining $3.75 million will be used to compensate its customers.

The penalty stemmed from Robinhood Markets, Inc. (NASDAQ:HOOD)’s alleged inadequate management of social media influencers promoting the platform and for not addressing alerts about delays in trade processing.

The issue peaked in January 2021 when Robinhood Markets, Inc. (NASDAQ:HOOD) was said to have limited transactions in meme stocks like GameStop and AMC Entertainment Holdings due to unusual trading volumes.

Overall HOOD ranks 2nd on our list of Monday’s worst performing stocks. While we acknowledge the potential of HOOD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HOOD but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.