As Robinhood Slumps 23%, Cathie Wood's ARK Invest Buys Up Rp148 Billion in Shares

ARK Invest, the asset management firm owned by Cathie Wood, has again added to its stake in Robinhood Markets Inc. amid selling pressure weighing on the brokerage platform's share price. On Wednesday (29/10), ARK bought 99,418 Robinhood shares worth about $9.1 million, its largest purchase since April. The transaction was made through three exchange-traded funds (ETFs) managed by ARK: ARK Innovation ETF (ARKK), ARK Next Generation Internet ETF (ARKW), and ARK Blockchain & Fintech Innovation ETF (ARKF).

The move is contrarian given that Robinhood shares (ticker: HOOD) are in a sharp downtrend. On the same day, the stock closed down 3.3% at $91.43, extending its one-month decline to more than 23%. In Thursday premarket trading, Robinhood shares fell another 1.88% to $89.7. The ARK purchase also reverses course after the firm aggressively sold Robinhood shares worth a total of $47.5 million between 6 and 9 October, when the price was still around $107–$112 per share.

The main trigger for the Robinhood share correction was the release of third-quarter financial results that disappointed the market. Although total revenue reached a record $1.42 billion, up 12% year on year, the figure was slightly below the analyst consensus. Earnings per share (EPS) came in at $0.51, well below the $0.55 estimate, while net income fell 14% to $476 million. Most notably, cryptocurrency transaction revenue plunged 55% to $120 million, and crypto trading volume shrank 38% to $50 billion. The decline reflects weakening retail investor interest in digital assets as the crypto market sags.

ARK, however, appears undeterred. Instead, it sees opportunity behind the weakness in Robinhood shares. Outside the crypto business, several Robinhood business lines are showing impressive growth. Revenue from prediction markets jumped to $173 million, more than six times the figure in the same period last year, and even surpassed revenue from crypto transactions. Meanwhile, options revenue rose 31% to $399 million. ARK views this diversification as a buffer that can support Robinhood's performance going forward, especially while the crypto market is in a downcycle.

For Indonesian investors, ARK's maneuver can serve as a mirror for strategy in dealing with volatility in the technology and crypto sectors. Robinhood itself is not a foreign name to some retail investors in the country who are active in global markets, although direct access to its shares is limited. The phenomenon of declining crypto revenue is also relevant to conditions in the domestic digital asset market, which has recently shown a correction. Meanwhile, growth in prediction markets and options shows that financial platforms able to diversify their products have better resilience amid turbulence. ARK's bold move to buy as prices fall reflects confidence that Robinhood's intrinsic value is not fully reflected in the current price.

"We take advantage of volatility to accumulate assets we believe have long-term prospects, especially when the market is overly reactive to short-term performance," reads a statement the ARK team typically includes in its monthly report, reflecting their contrarian investment philosophy.

Looking ahead, whether ARK's move pays off still depends on Robinhood's ability to maintain momentum in non-crypto segments, especially the booming prediction market. If this trend continues, HOOD shares could recover and deliver returns for ARK. But risks remain: if the crypto market deteriorates further and retail interest keeps declining, pressure on Robinhood's performance could continue. Investors need to watch whether ARK will add to its stake again or instead sell shares again if the price keeps falling. What is clear is that this purchase confirms that behind a sharp correction, there is always someone who sees opportunity.