Commission Free Trading App Robin Hood is officially a publicly traded company, but investors have not rolled out the welcome mat for the stock. Shares of Robinhood, which trade under the symbol “HOOD,” opened on the Nasdaq at $38 a share before falling to about $33. The new stocks managed to recoup some of those losses and fell 5% at last check, which is better than the nearly 10% declines earlier in the session.
Isn’t it ironic?
There has been a lot of hype surrounding the Robinhood app for a variety of reasons, including the decision to reserve stock for its users. Robinhood promised more than a third of its float for trading app customers, which is on the generous side. A typical IPO reserves less than 10% for retail investors, as hedge funds and other large investors tend to get first dibs.
Individual investors have seemingly not returned the favor to Robinhood, leaving the mobile trading app stuck on its stock market debut. It could have gone either way. Robinhood hoped to restore the fences between itself and duped retail investors who were holding the bag after the broker imposed trading restrictions on popular meme stocks, including GameStop and AMC entertainment.
The massive purchase of GME and AMC by the Reddit WallStreetBets mob in early 2021 put pressure on shortsellers, mainly hedge funds, and Robinhood collapsed under the pressure. The broker has since lifted those trading restrictions. Apparently, however, all is not well that ends well, if Robinhood’s stock price on day one is any indication. Social media members couldn’t resist the irony of the situation.
Robinhood begins its future as a publicly traded company with a market capitalization of $34 billion. A few smart ones donors who timed it right are Nas and Snoop Dogg, who invested in the trading app in 2014 when the company was valued at $62 million.
NBA champion Kevin Durant and his manager Rich Kleiman probably aren’t complaining either. They placed a bet four years ago through Thirty Five Ventures, the co-founder of VC firm Drant and Kleiman.
Their return to Robinhood is reportedly on the sidelines of 2500%.
This one article was originally posted on FX Empire