Robinhood (HOOD) stock dips after hacking attack exposes customer data

Robinhood Markets, Inc. (NASDAQ: HOOD) stock fell more than 3% in premarket trading on Tuesday after reporting a cyberattack on its systems last week.

The HOOD stock was down 3.11% to US$36.80 at 8:43 am ET on Nov 9.

On Monday, Robinhood said hackers had gained access to five million email IDs, two million customers names, zip codes, and other personal data in an online security breach on Nov 3.

Robinhood (HOOD) stock dips after hacking attack exposes customer data

However, there was no financial loss to any of its clients. The online trading platform said there were no compromise of customer security codes, bank account numbers, or debit card details.

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What Robinhood said

In a blog post, the company said attackers hacked into the phone of a customer support employee to gain “access to certain customer support systems.”

Hackers demanded a ransom after securing the systems. However, the company reported to law enforcement agencies and private security firm Mandiant to probe the breach.

The California-based company also said that "extensive account details" of 10 customers have been exposed in the breach without giving more details. Hackers might use the information to send fishing emails to the victims as details like name, birth date, etc., were revealed.

The data might also be used illegally to facilitate the verification of a person's identity.

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Stock Performance and Financials

Robinhood’s market cap is US$32.65 billion, and the forward P/E one-year is -151.92. Its 52-week highest and lowest stock prices were US$85.00 and US$33.25, respectively. Its trading volume was 7,149,237 on Nov 8.

The Menlo Park, California-based company’s net revenue jumped 35% YoY to US$365 million in Q3, FY21, compared to US$270 million in the same period a year ago.

In addition, it reported a net loss of US$1.31 billion, or US$2.06 per diluted share, in the quarter against a loss of US$10.66 million, or US$0.05 per diluted share in Q3, FY20.

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Robinhood’s trading platform allows clients to trade stocks, exchange-traded funds (ETFs), and cryptocurrencies. The stock has been catching attention since its NASDAQ listing on July 29.

Bottomline

The Robinhood stock saw significant gains in recent months as more people are signing up for its services. The HOOD stock price jumped 9.08% since its stock market debut. However, investors should closely evaluate the companies before considering an investment in stocks.