Cathie Wood’s ARK Invest has increased its exposure to Robinhood Markets, buying nearly $13 million worth of shares after the trading platform secured a role in a new government-backed savings initiative.
Trade disclosures released by ARK on Tuesday show a new backlog of Robinhood shares across multiple funds. The ARK Innovation ETF (ARKK) led the charge, purchasing 132,116 shares of HOOD stock. Additional purchases came from the ARK Next Generation Internet ETF (ARKW), which added 33,607 shares, and the ARK Fintech Innovation ETF (ARKF), which added 16,918 shares.
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Robinhood exploits Trump’s accounts
The purchase came after the US Treasury Department said Robinhood would serve as the brokerage and primary custodian for Trump’s accounts, a new tax-advantaged investment account program for children. Eligible US citizens born between January 1, 2025 and December 31, 2028 will receive a $1,000 government contribution to those accounts, the Treasury Department said.
According to Monday’s announcement, BNY has been appointed as fiscal agent and will manage the initial accounts and help develop Trump’s accounts app. Robinhood will serve as the brokerage and initial custodian, while the Treasury Department said it will retain control of the app and operations of the initial accounts.
Robinhood also pledged to match the government’s $1,000 contribution for eligible children of its employees.
Robinhood stock closed at $69.65, down slightly on the day, but rose in after-hours trading to $74.92, posting a gain of more than 7.5%, according to data from Yahoo! finance.
At a closing price of approximately $69.65 per share, ARK’s total purchase of 182,641 shares equates to approximately $12.7 million. This is the first time the investment firm has bought Robinhood shares in nearly a month.
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Robinhood launches $1.5 billion stock buyback
Last month, Robinhood received board approval to buy back $1.5 billion of its shares over the next three years, combining $1.1 billion of new buyback capacity with amounts rolled over from a previous program. The buyback comes as Robinhood shares have struggled this year amid a broader decline in stocks and cryptocurrencies.
In February, Robinhood reported fourth-quarter revenue of $1.28 billion, missing analysts’ expectations of $1.34 billion, while cryptocurrency revenue fell 38% to $221 million. Net income fell 34% to $605 million, with earnings per share slightly beating estimates at 66 cents.
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