Shares of Robinhood Markets (HOOD 0.95%) are spiking on Monday, up 12.1% as of 3:24 p.m. ET. The jump comes as the S&P 500 and Nasdaq Composite were both up 0.3%
Robinhood announced on Monday that it is launching tokenized trading in the E.U., allowing customers to trade U.S. stocks around the clock.
NASDAQ: HOOD
Key Data Points
Robinhood makes a major token play
Robinhood has launched commission-free tokens in the European Union, the first step in allowing customers to trade more than 200 U.S. stocks and ETFs, including Nvidia, Apple, outside of traditional U.S. stock exchange trading hours.
The tokens are issued in partnership with blockchain firm Arbitrum and represent a significant new direction for the company. The tokens blur the lines between crypto and traditional equities and are part of a plan that includes 24/7 trading on its own blockchain. Additionally, it launched crypto perpetual futures for E.U. customers and crypto staking for U.S. users, expanding its crypto offerings as it competes with crypto native exchanges like Kraken and Coinbase and seeks to capitalize on growing interest.
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Robinhood is highly valued
While Robinhood has seen incredible revenue and earnings growth, there is a lot of hype around the stock. This has led to a pretty hefty valuation with a price-to-earnings (P/E) ratio of nearly 50.
That's not outrageous for a tech company growing at this rate, but investors should keep it in mind. I think its push into crypto and tokenized trading represents a large opportunity, and for investors with a higher risk tolerance, Robinhood stock is a solid pick. Just be aware that if growth stagnates, the stock could see a significant correction.
