Official statements from Robinhood and SEC, press releases

Robinhood Issued Wells Notice by SEC, Stock Rises; Analysts Set $21 Target

May 7, 2024, 10:50 PM

Robinhood has been issued a Wells Notice by the SEC, signaling intensified regulatory scrutiny over its cryptocurrency practices. Despite this, market reactions were muted, with Robinhood's stock price rising by 1.6%. Analysts from KBW and Mizuho have expressed confidence in Robinhood's ability to manage these regulatory challenges, citing the company's conservative approach to digital asset listings and predicting a favorable outcome in any potential legal battle with the SEC. Mizuho has reiterated a 'Buy' rating with a $21 target for Robinhood's stock. Meanwhile, the broader implications of the SEC's actions include a significant impact on how cryptocurrencies are treated legally, questioning whether they should be classified as securities. Robinhood's CLO, Dan Gallagher, a former SEC commissioner, could play a crucial role in the legal proceedings. Additionally, Robinhood's CEO has publicly vowed to fight the SEC's regulatory measures.