I’m Doubling Down on HOOD Stock… Here’s Why

Ladies and gentlemen, we just got breaking news from Robin Hood that can completely change the trajectory of this stock. Now, first up, Robin Hood is a brokerage. They're not really a cash heavy business. This is a very important part because they make all of their money through feebased revenue. A business that has been extremely profitable for them and they've been growing cash over time and not really needing to spend a lot in order for them to grow. They're considered a capitalite business, which is some of the best companies to invest in. However, Robin Hood is now looking to raise money. And this is really surprising to a lot of long-term investors like myself that potentially look at this company and say, "Why are you raising $2 billion with up to an additional $200 million which is likely to go through?" Cuz that's been going through almost all the time whenever it comes to many of these convertible notes and private placements that we've seen previously from other stocks right now. So, Robin Hood, a company with $5.2 billion, needs $7.4 4 billion and they're willing to pay for interest and then eventually dilute stockholders in order to do what exactly? It even says here that they want to do three things with this cash. Organic growth, M&A, meaning mergers and acquisitions, and shareholder returns. Now, when it comes to shareholder returns, it's not very common for companies to raise money in order to just buy back stock. It does happen from time to time, like Salesforce, for example, but Robin Hood is in a completely different situation. This looks to me like it's going to be for M&A purposes. Organic growth. Obviously, you want a lot of cash, but what's the difference between 5.2 billion and 7.4 billion? Especially that the cash positions actually been going up over the last four quarters. M&A seemingly is the next best offering. So, who are they going to buy and how much is this going to cost? I'm looking to companies that either expand them internationally, enter into new markets, or just potentially take over new competitors like E Toro, for example. That's a multi-billion dollar company as well. Fits in well with the retail trading space that Robin Hood also has. And they also have technology advantages as well that might broaden the scope of what Robin Hood has to offer. But until Robin Hood tells us anything more, we really don't know until further notice. That being said, they still have been purchasing more shares. They also said in their report that they will try to buy back some stock to lower the overall dilution, but still they have been buying back stock and have been lowering their overall count. So, they're not wanting to rush into a lot of dilution because, well, a lot of their growth, they don't really need to be extremely cash heavy. It's a very capital-like business, meaning that their strategy of how they go about growing is more important than the amount of capital that they have in their balance sheet. But this brings me on to June trading metrics, which is what they also posted alongside this new convertible note offering to potentially sweeten the deal a little bit on today's trading. They ended up showing off that between Monday, June 1st, and Thursday, June 18th, which is pretty early on in the month for most of this trading color that we end up seeing. They ended up showing off their total equity trading volume at roughly $269 billion. Options contracts traded at 217 million contracts and cryptonional volume coming in at approximately 12 billion, split between both Robin Hood and Bitstamp notional trading volume. We also ended up seeing event contracts trading was approximately 3.1 billion contracts traded, $1 per contract. And the most important part is that this is between June 1st and June 18th. Some of these numbers, if you guys know how much they do per month is insane. So if I were to take the average daily trading volume by dividing the amount that they did versus the amount of days that they had to do it by. So we need to know the amount of trading days and then the amount of trading days total for crypto as well. Those are two different days. What we end up seeing is that equity total trading volume, if we assume that amount of daily trading volume per day all the way through June, we would get a new all-time high for equity trading volume for the full month of June. We would also see options contracts traded hit a brand new all-time high of 314 million total contracts. A new all-time high greatly surpassing how much we've seen in October. By the way, October was 266 million or even last month somewhere around 224 million. Yet, we saw 217 million just between June 1st and June 18th. There's been a lot of total trading activity, which is higher than most months here in general, and we're only halfway through the month. And then look at event contracts. This is just huge. We're already at 3.1 billion so far. And what you end up seeing is that this growth can continue on so much higher in crypto. Honestly, not that bad. 12 billion was how much we did last month, and we've already done that between June 1st and June 18th, which is what I thought was going to be one of the weakest segments. Now, we don't know the actual percentages that we're going to earn on those crypto trades, but the overall volume is looking to be quite high if we keep up this amount of volume. So assuming that we have the exact same take rate as last quarter, what we can essentially look at is total transactional volume split between equities cryptocurrency options and then event contracts as being roughly the same as what we saw from Q4 of 2025, the best quarter we've ever seen in Robin Hood history back whenever the stock was trading at $150 per share. We also know based on May trading volume metrics that total assets under custody was at $377 billion. This is without WonderFi coming on the platform and without their 300,000 new total customers. If we just to assume May's total account balances, net interest revenue is also looking to climb up quite drastically. And so what we're seeing is over $1.3 billion of total revenue, a great correction from where we were quarter over quarter, even year-over-year from Q2 of last year at only 988 million. This is showing a significant rate of growth and positioning us back in some of the strongest quarters that we've ever seen in Robin Hood's history, like what we've seen in Q3 and Q4 of last year. But the interesting part about the momentum on Robin Hood is not that we see a small spike in activity only to then lose it next quarter. There's aspects of this business that stay sticky, like Robin Hood Gold subscribers, which you can see quarter after quarter after quarter, even during the weak quarters like we saw last quarter in in Q1 of 2026, the percentage of overall users, not only the total amount of users in Robin Hood Gold, but the percentage also ended up climbing to all-time highs, which those customers are paying five bucks a month. They end up having higher assets under custody. they deposit more onto the platform and they end up signing up for new products as well like Robin Hood's retirement account. That's another product. These types of customers that end up getting into Robin Hood Gold end up bringing on new money onto different products. So, we see retirement accounts spike. We see the assets under custody spike. And then we also see things like Robin Hood banking or strategies or gold card like their credit card continue to grow. That is completely separate from what we've seen from this trading momentum. But the trading momentum brings them on the platform to learn about all these other products that have nothing to do with the overall momentum of different platforms like event contracts or equities. So overall, these bursts of momentum for Robin Hood lead to better foundations for quarters to then spring up even more because if you're using Robin Hood banking, you're likely to want to invest in other companies like potentially the SpaceX IPO or OpenAI's IPO or Enthropic, which could be other momentous occasions. And that will be very exciting for Robin Hood as more and more users stay on their platform for the rest of these products. In other hood news, I just wanted to point out that the overall amount of shorting on this company has also slowed down. Back in November, we had about 45 million total shares outstanding shorting this company. That's now fallen to under 34 million or roughly about 34 million. And then the overall amount of long ownership in terms of institutional ownership, institutions that are betting for Robin Hood to do well has also reverted back up. It's not quite the highest. The highest was sort of in that February time, but a big spike up from where we were just last month. So, this is looking like an amazing setup for Robin Hood. I believe that this company is going to hit all-time highs once again, which would be north of $150. And I'm investing here today to make sure that I'm a part of this train before it takes off again. But let me know what you guys think down in the comments down below. Do you guys like Robin Hood here or is there another stock that might be catching your eye? Thank you all so much for watching. Really do appreciate your time.