We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Robinhood (HOOD) to Buy X1 for $95M, Expand Product Offerings
Read MoreHide Full Article
Robinhood Markets, Inc. (HOOD - Free Report) has announced a plan to acquire X1 Inc., a platform that offers a no-fee credit card with rewards on each purchase. The acquisition, valued at approximately $95 million in cash, is expected to be finalized in the third quarter of 2023. Through this strategic move, HOOD aims to expand its product offerings and diversify its revenue streams.
The acquisition aligns with Robinhood's mission to democratize finance by providing people with access to a no-fee credit card. San Francisco-based X1's stainless steel credit card stands out due to its lack of annual fees, late fees or foreign transaction fees. Also, X1's intuitive mobile app experience complements HOOD's commitment to design innovation and customer expectations.
The X1 team, including co-founders Deepak Rao and Siddharth Batra, will be integrated into Robinhood, with Rao serving as the general manager of Credit Cards, reporting directly to Vlad Tenev, Robinhood's CEO and co-founder.
The acquisition allows Robinhood to enter the credit card market and tap into the interchange fee revenues that come with it, complementing the existing interchange fees earned from its debit card.
With the expansion into the credit card market, Robinhood aims to strengthen its position in the fintech industry and generate new revenue sources.
The acquisition represents a significant step for HOOD as it seeks to broaden its product offerings and deepen its relationship with customers. It also demonstrates the company’s adaptability to market conditions and commitment to long-term sustainability.
This move is crucial, given the recent slowdown in crypto trading and declining performance in its core trading business. By diversifying its business and revenue streams, the company aims to counter these challenges and drive growth.
The X1 acquisition comes as Robinhood seeks to move beyond the controversies it faced in recent years, including the meme stock trading frenzy and the fallout from backing out of the Ziglu buyout. With this deal, Robinhood looks to turn the page and focus on delivering innovative financial products and services to its customers.
The acquisition will enhance HOOD's financial performance and contribute to its overall growth trajectory. It will be essential for the company to effectively leverage the capabilities and expertise of X1 to deliver an enhanced credit card experience to its customers.
So far this year, shares of HOOD have rallied 16.1% against a 10.5% decline for the industry.
Inorganic Expansion Efforts By Other Finance Firms
JPMorgan (JPM - Free Report) has formed a strategic alliance with Cleareye.ai, a financial technology firm focused on trade finance. Trade finance refers to the financial products offered by institutions that seek to facilitate global trade by reducing counterparty risk between importers and exporters.
JPM’s investment in Cleareye.ai leverages the ClearTrade platform, solving the challenges faced by trade finance (the industry is undergoing a digital transformation).
Tradeweb Markets Inc. (TW - Free Report) , a leading global operator of electronic marketplaces and money markets, entered into a definitive agreement to acquire Yieldbroker, a prominent Australia-based trading platform, in an all-cash transaction of A$125 million. The deal's closing, subject to customary conditions and regulatory reviews, is expected by the end of this year.
The transaction will facilitate a more liquid, transparent and efficient fixed-income market by bringing together innovative trading solutions and deep industry experience of both companies. Hence, the acquisition aligns with TW’s mission to make markets more efficient.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Robinhood (HOOD) to Buy X1 for $95M, Expand Product Offerings
Robinhood Markets, Inc. (HOOD - Free Report) has announced a plan to acquire X1 Inc., a platform that offers a no-fee credit card with rewards on each purchase. The acquisition, valued at approximately $95 million in cash, is expected to be finalized in the third quarter of 2023. Through this strategic move, HOOD aims to expand its product offerings and diversify its revenue streams.
The acquisition aligns with Robinhood's mission to democratize finance by providing people with access to a no-fee credit card. San Francisco-based X1's stainless steel credit card stands out due to its lack of annual fees, late fees or foreign transaction fees. Also, X1's intuitive mobile app experience complements HOOD's commitment to design innovation and customer expectations.
The X1 team, including co-founders Deepak Rao and Siddharth Batra, will be integrated into Robinhood, with Rao serving as the general manager of Credit Cards, reporting directly to Vlad Tenev, Robinhood's CEO and co-founder.
The acquisition allows Robinhood to enter the credit card market and tap into the interchange fee revenues that come with it, complementing the existing interchange fees earned from its debit card.
With the expansion into the credit card market, Robinhood aims to strengthen its position in the fintech industry and generate new revenue sources.
The acquisition represents a significant step for HOOD as it seeks to broaden its product offerings and deepen its relationship with customers. It also demonstrates the company’s adaptability to market conditions and commitment to long-term sustainability.
This move is crucial, given the recent slowdown in crypto trading and declining performance in its core trading business. By diversifying its business and revenue streams, the company aims to counter these challenges and drive growth.
The X1 acquisition comes as Robinhood seeks to move beyond the controversies it faced in recent years, including the meme stock trading frenzy and the fallout from backing out of the Ziglu buyout. With this deal, Robinhood looks to turn the page and focus on delivering innovative financial products and services to its customers.
The acquisition will enhance HOOD's financial performance and contribute to its overall growth trajectory. It will be essential for the company to effectively leverage the capabilities and expertise of X1 to deliver an enhanced credit card experience to its customers.
So far this year, shares of HOOD have rallied 16.1% against a 10.5% decline for the industry.
Image Source: Zacks Investment Research
Currently, Robinhood carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Expansion Efforts By Other Finance Firms
JPMorgan (JPM - Free Report) has formed a strategic alliance with Cleareye.ai, a financial technology firm focused on trade finance. Trade finance refers to the financial products offered by institutions that seek to facilitate global trade by reducing counterparty risk between importers and exporters.
JPM’s investment in Cleareye.ai leverages the ClearTrade platform, solving the challenges faced by trade finance (the industry is undergoing a digital transformation).
Tradeweb Markets Inc. (TW - Free Report) , a leading global operator of electronic marketplaces and money markets, entered into a definitive agreement to acquire Yieldbroker, a prominent Australia-based trading platform, in an all-cash transaction of A$125 million. The deal's closing, subject to customary conditions and regulatory reviews, is expected by the end of this year.
The transaction will facilitate a more liquid, transparent and efficient fixed-income market by bringing together innovative trading solutions and deep industry experience of both companies. Hence, the acquisition aligns with TW’s mission to make markets more efficient.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.