Robinhood Markets (HOOD.O) announced its first share buyback plan on Tuesday, committing to repurchase $1 billion worth of stocks as it aims to transition beyond its startup phase. This move reflects Robinhood’s strategy to attract investors seeking signs of maturity, a tactic commonly associated with older companies. The buybacks will occur over two to three years starting from the third quarter. Following the announcement, shares rose 4.3% to $21.34, potentially reaching their highest level since December 2021.
Robinhood’s shares have surged nearly 61% this year, though they remain 58% below their August 2021 peak. The company has expanded its offerings, including a new credit card for premium subscribers and a retirement account launched in late 2022. Trading in futures and index options is expected later this year. Additionally, the core trading business has rebounded, driven by optimism for a soft landing for the U.S. economy, encouraging customers to return to equities and crypto.