Robinhood Markets Inc (NASDAQ:HOOD) shares fell in after-market trading as it reported worse quarterly losses due to a processing error on its trading app.
It lost US$57mln on December 16 due to an error which allowed users to sell more shares than they actually held in Cosmos Health Inc, sparking a US$0.08 earnings per share shortfall.
This fuelled a US$166mln net loss in the fourth quarter and overall earnings per share of US$0.19, which was worse than Wall Street estimates and resulted in full-year losses of over US$1bn.
Robinhood, which was a key part of the meme stock era in early 2021, where small investors clubbed together on social media to rout hedge funds shorting companies, also said it was looking to buy back 55mln shares held by Sam Bankman-Fried’s Emergent Fidelity Technologies.
Bankman-Fried is locked in a legal battle with the new bosses of his disgraced FTX exchange over the shares though, with both laying claim to the 7.6% stake, worth US$450mln.
“Since there is limited precedent for this type of situation, we cannot predict when, or if, the share purchase will take place,” Robinhood said in its trading update.
FTX’s new bosses filed a lawsuit in December laying claim to the shares currently held by Bankman-Fried, suggesting following November's collapse of the exchange, the assets should be held by the debtors’ estate in order to pay back creditors.
Robinhood’s share price was up nearly 5% in after-hours trading to US$10.97.