Cramer says Robinhood is a dogecoin gateway, knocks firm for warning about September slowdown

Published Thu, Aug 19 202110:29 AM EDTUpdated Thu, Aug 19 202110:38 AM EDT

Robinhood 's financials are too narrowly reliant on dogecoin trading, according to CNBC's Jim Cramer. "When you peel back the onion of Robinhood it seems like it's a dogecoin gateway," Cramer said Thursday on " Squawk on the Street ." Shares of Robinhood slipped more than 8% Thursday morning. The company issued its second-quarter earnings report after the bell Wednesday. While the newly public brokerage more than doubled its quarterly revenue to $565 million, the company revealed more than 51% of its transactional revenue came from crypto trading. Plus, dogecoin — a meme-inspired token — accounted for 62% of crypto revenue in the second quarter . "The numbers are quite surprising about how much is dogecoin and it's very clear to me that this is company that has become a crypto company," the "Mad Money" host said. Crypto trading, which Robinhood first introduced in 2018, has ballooned in the past few years. Robinhood offers trading in seven different digital coins, including bitcoin, ethereum and litecoin. However, the digital asset accounted for more than half of transaction revenue last quarter, up from just 17% in the first quarter. More than 60% of cumulative net funded accounts traded crypto in the quarter. In the second quarter of 2020, crypto-based revenue was just $5 million. Robinhood even warned about the financial repercussions if its clients dim on the idea of trading dogecoin. "If demand for transactions in dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition and results of operations could be adversely affected," Robinhood said in a 10Q released after the bell on Wednesday. The free-trading pioneer also warned of an overall trading slowdown in the current quarter due to seasonality. "They're talking about seasonality, that seasonality is going to be bad in September," Cramer said. "That's when you kill it in the business. The seasonality is fabulous in September, so I don't know what kind of calendar they're on."

Vlad Tenev and Baiju Bhatt attend Robinhood Markets IPO Listing Day on July 29, 2021 in New York City.

Cindy Ord | Getty Images

Robinhood's financials are too narrowly reliant on dogecoin trading, according to CNBC's Jim Cramer.