Robinhood Set to Join S&P 500 as Bitcoin Giant Strategy Misses Out

In brief

Robinhood was added to the S&P 500
Publicly traded digital asset-focused firms have benefited from the friendlier regulatory and political environment of recent months.
The S&P 500 added crypto exchange Coinbase to the index in May.

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Shares of Robinhood soared 7% in after hours trading after the retail brokerage, which focuses heavily on digital assets, was added to the S&P 500.

Robinhood (HOOD) soared past $108 per share after closing Friday a little above $101, according to Yahoo Finance. The company's share price has soared more than 150% year-to-date.

HOOD will join the index on September 22, according to a press release from S&P Dow Jones Indices. Advertising technology firm AppLovin was also added by the index. S&P Dow Jones reshuffles the index on the first Friday of the last month of the third quarter, which ends in September.

But the S&P 500 will not include Bitcoin treasury firm Strategy, disappointing some observers. Strategy's $95 billion market cap was large enough to meet the S&P's threshold for inclusion. S&P-listed companies must be U.S.-based and have market values of more than $20 billion.

Shares of Tysons Corner, Virginia-based Strategy, formerly MicroStrategy, were down nearly 3% in after-market trading. Strategy holds more than $70 billion worth of Bitcoin and pioneered the digital assets treasury strategy that numerous other firms have since adopted.

The S&P decision underscores the growing might of digital asset-focused companies, which have benefited from the friendlier political and regulatory environment of recent months. Amid this shift, institutional investor interest in cryptocurrencies has risen, spurring big price gains among Bitcoin, Ethereum, and other leading assets and massive inflows to crypto-based exchange-traded funds.

Cryptocurrency exchange Coinbase began trading on the S&P index on May 19.

In its second quarter, Robinhood posted a stronger-than-expected performance, surpassing analyst expectations, despite a cooldown in revenue from crypto trading.

The retail brokerage posted $989 million in total sales, up 45% from a year ago and beating analysts’ expectations of $913 million, according to MarketScreener data.

With an earnings per share mark of $0.42, Robinhood reported $386 million in second-quarter profits, up $50 million year-over-year and beating analyst expectations of $276.6 million.

Robinhood said that it generated $160 million in crypto trading revenue during the second quarter, a 98% increase from a year ago. However, the figure fell quarter-over-quarter from $252 million, as U.S. President Donald Trump’s trade war dominated headlines.

At the same time, transaction-based revenues for options and equities increased quarter-over-quarter, rising to $265 million and $66 million, respectively. After crypto trading boomed for Robinhood late last year, totaling $672 million in Q4, options-based income has become Robinhood’s main money maker again.