Robinhood IPO: Shares Drop at $38 After Opening


SAN FRANCISCO — Robinhood helped propel a “meme stock” craze earlier this year that sent small companies’ stock prices on a roller coaster ride. On Thursday, its IPO was much more subdued.

Shares at the start of the stock trading were trading at $38, the same price as its quote, but later dropped. The bid price, valued at $31.7 billion and below its suggested range, showed investors might be hesitant to buy the company’s grand mission to disrupt Wall Street.

Robinhood’s free stock trading service has helped create the conditions for wild trading returns in so-called meme stocks driven by investors exaggerating their trades on social media. With its mission to democratize finance, the company has decided to sell one-third of its offer to retail merchants through its own app. Contributing to the unpredictability of the first trade.

Its bid ranks among the biggest in a frenetic year for public releases, but few companies have had the level of profile and controversy as Robinhood, including cuts, fines, Congressional hearings, protests, and memes.

The list shows that investors’ enthusiasm for IPOs can have limits for them, even in a blockbuster year. According to Renaissance Capital, which tracks IPOs, 213 initial public offerings took place in the first half of the year, which is more than any year in the past two decades. Grocery delivery company Instacart and social network Nextdoor are among those expected to go public this year.

Robinhood’s CEO and co-founder, Vlad Tenev, said in an interview that the IPO is “a celebration of the individual investor in America.”

Mr. Tenev stressed the importance of Robinhood offering large volumes of stock to its customers. “We recognize that this is an important moment for our customers as well,” he said.

About 20 percent of the offer has been sold to customers, according to a person familiar with the offer, which is at the lower end of the range Robinhood plans to sell and has shown less interest than expected.


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *