Robinhood's stock jumps after company launches first credit card

By Ciara Linnane

Company moves to expand beyond its trading app with no-fee card offering 3% cash back on all goods

Robinhood Markets Inc.'s stock rose 3% on Wednesday, after the company unveiled its first-ever credit card as it moves to expand beyond its current role as a trading app.

The Robinhood Gold Card is aimed at Robinhood Gold members - a subscription product offering premium services for a fee - and has no annual fee or transaction fees, but comes with a 3% cash back on all categories, the company said in a statement late Tuesday.

The card was unveiled at a live-streamed event by Robinhood (HOOD) Co-Founder and Chief Executive Vlad Tenev.

"There's always been special perks and opportunities reserved for the wealthy that make them even richer," Tenev said in a release. The new card "brings us one step closer to the goal of giving everyone better access to the financial system," he said.

Other perks include a 5% cash back when a holder books through the company's new travel portal. Reward points are redeemable for travel, gift cards and shopping at retailers that include Apple, Nike and Bloomingdale's, among others.

Points can also be redeemed for cash, which can be transferred to the brokerage account to invest.

The move comes after Robinhood acquired San Francisco-based platform X1 for $95 million last June in an all-cash deal. X1 offers a no-fee stainless steel credit card that also comes with no annual fees or transaction fees.

Robinhood's stock has gained 124% in the last 12 months, while the S&P 500 SPX has gained 31%.

-Ciara Linnane

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03-27-24 1007ET

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