Trading platform Robinhood has authorized a $1.5 billion stock buyback program over three years, signaling confidence amid a steep share price decline. The company also secured a larger $3.25 billion credit facility with JPMorgan Chase. Despite stock struggles, Robinhood continues its crypto push, with its new Ethereum layer-2 network, Robinhood Chain, set for a mainnet launch this year.
Robinhood’s board approved a $1.5 billion share repurchase program to be executed over three years. The program includes $1.1 billion in new capacity, with the remainder from an older program.
“Robinhood is a generational company with a massive long-term opportunity,” CFO Shiv Verma said in a statement. He stated the move reflects confidence in delivering products and creating shareholder value.
This buyback comes as Robinhood stock has significantly fallen this year. Shares closed down 4.7% to $69.08 on Tuesday, reaching their lowest level of the year.
The stock is down nearly 39% year-to-date and has fallen 54.7% from its all-time high in October. The company detailed this in a recent Securities and Exchange Commission filing.
However, the 12-month average price forecast from analysts on TipRanks is $123.85. Sixteen Wall Street analysts collectively rate the stock as a “strong buy.”
Separately, Robinhood Securities entered a new $3.25 billion revolving credit facility with JPMorgan Chase. This replaces a prior $2.65 billion facility and can expand to a maximum of $4.87 billion.
Despite stock performance, the company is advancing in cryptocurrency. It launched its own Ethereum layer-2 network, Robinhood Chain, to testnet in February.
CEO Vlad Tenev said the network processed 4 million transactions in its first public week. The mainnet launch for the network, designed for tokenized equities and ETFs, is planned for later this year.
