Robinhood Markets Inc. (NASDAQ:HOOD) witnessed a surge in its stock price following the announcement of a plan to repurchase up to $1 billion worth of its shares.
The retail brokerage firm disclosed its intention to initiate the buyback program in the third quarter, intending to complete it in two to three years, as stated in a filing released on Tuesday. Following the news, shares in Robinhood surged by as much as 7.4% during late trading hours in New York, after the approval of the repurchase plan by its board.
According to Chief Financial Officer Jason Warnick, Robinhood outlined this program against the backdrop of continued growth in its business and cash flow, as highlighted in a blog post.
This move by Robinhood reflects its strategic pivot towards diversifying its offerings beyond retail brokerage services and commission-free trading, which initially propelled the company to prominence. In recent developments, the Menlo Park, California-based firm unveiled plans for a retirement product early last year. Furthermore, in March, it announced intentions to introduce a credit card for US consumers, signaling its ambition to evolve into a comprehensive financial services provider.
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