Robinhood’s prediction market growth makes Morgan Stanley a bull

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Photo by Gabby Jones/BloombergRobinhood Markets Inc.’s prediction markets efforts offer a “proof point” that the online brokerage can keep expanding revenue, according to Morgan Stanley analyst Michael Cyprys.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountCyprys upgraded the stock to overweight from under-weight citing Robinhood’s more than two million users generating US$156 million of second-quarter revenue while “adopting other products.”Robinhood is “turning product velocity into stronger customer economics,” Cyprys wrote in a Tuesday note. He flagged “more assets, activity and monetization per customer, supporting a longer growth runway than appreciated.”Canada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try againShares rose as much as 2.1 per cent in Tuesday trading. The stock has rallied more than 60 per cent since a late-March low. Robinhood’s chief executive Vlad Tenev said in a Monday evening social media post that Robinhood Banking had crossed US$4 billion in assets.July’s FIFA World Cup had served as a testing ground for Rothera, the derivatives exchange that Robinhood owns along with Susquehanna International Group, while second-quarter results showed predictions markets eclipsed cryptocurrency trading. Tenev said in late July that the prediction markets business was the fastest growing in the firm’s history.“Rothera extends Robinhood’s distribution advantage into infrastructure,” Cyprys said.Cyprys also mentioned potential catalysts from perpetual futures and agentic trading, along with the company’s Sept. 29-30 event.Last month, Morgan Stanley strategists led by Eli Carter said that prediction markets like Kalshi were “increasingly useful” signals for investors, particularly regarding Federal Reserve policy and major United States economic data releases.—With assistance from Monique Mulima.We apologize, but this video has failed to load.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.