Hi Reader, here's what you need to know for August 20th in 3:05 minutes.

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Today's big stories

Robinhood’s stock dropped after its earnings announcement, with crypto mostly to blame
You might think you’ve missed all the recovery-driven opportunities, but there are still a few ready to play catch-up – Read Now
The price of iron ore tumbled to its lowest in months as China took a step back from steel

A Not-So-Warm Welcome

What’s Going On Here?

Robinhood posted a disappointing earnings update this week, in the trading platform’s first since it listed on the stock market.

What Does This Mean?

Meme stocks like GameStop and AMC Entertainment may have boosted Robinhood’s bank balance at the start of the year, but last quarter’s revenue – which surged 131% versus the same time last year – had a different headline-grabber to thank: crypto trading drove around 51% of the company’s revenue, up from 17% in the previous quarter.

The future isn’t looking quite so promising, mind you. For one thing, a significant portion of that trading was on dogecoin, which investors – who might be realizing that the one-time joke is no laughing matter – have sent down more than 50% from its May highs. Throw in the fact that summer tends to be a quiet period anyway, and crypto trading – and, by extension, the segment’s revenue – is likely to drop off this quarter.

Why Should I Care?

For markets: It’s all about those Benjamins.
If cryptocurrency trading does slow down, it’ll impact Robinhood in one of two ways: it’ll either reduce the amount of cash the company generates, or it’ll push those cash flows into a later quarter (tweet this). Either way, its stock – which investors value by how much cash they think it will generate in the future (discounted back to today) – will be worth less now, which might be why Robinhood’s shares initially fell 10% on Thursday.

The bigger picture: The crypto slowdown is real.
Robinhood is right to be nervous about the crypto market: Nvidia – which reported better-than-expected revenue and profit late on Wednesday – said sales of microchips used for crypto mining last quarter were 30% lower than the chipmaker had been expecting. That suggests there’ll be less enthusiasm for cryptocurrencies themselves going forward, at least in the near term.

You might also like: The pros and cons of investing in Robinhood.

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2. Analyst Take

You Can (Still) Profit From The Recovery

What’s Going On Here?

The economic recovery has been working wonders on plenty of companies’ share prices, but that’s probably not much good to you if you didn’t buy in last year.

Investors, after all, have already priced the recovery into the markets. In other words, stocks don’t have much more to gain from the bounceback.

Or rather, most of them don’t: Goldman reckons there are still a few companies that haven’t rebounded as quickly as investors were hoping.

That’s today’s Insight: which companies could be about to play catch-up.

Read or listen to the Insight here

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