the stock shot up again on Wednesday, jumping to $85, an 82% jump on the day.
There was no clear news to explain the rise, although there was clear interest from retailers. Nearly 10,000 buy orders had been entered on Fidelity by retail investors early Wednesday, three times as many as the next most-bought stock,
(ticker: GM). At least with GM, the move made sense, as the company just reported earnings. The stock rose just 29% to $60.58 at 12:20 p.m.
For Robinhood (HOOD) there is now an information vacuum. The company was not aware of any specific news driving the move, causing the stock to shut down due to the volatility at the start of trading.
Shares of Robinhood started trading at $38 last Thursday and closed 8% on day one. Several company insiders sold on the first day, while more than 301,000 of the company’s customers bought shares. In more recent days, prominent asset manager ARK Investment Management has bought shares and raised $4.9 million for its flagship ARK Innovation Fund — those shares are now worth more than $300 million. On Tuesday, shares of Robinhood rose 24%.
Robinhood now trades at about 40 times its last four quarters of revenue, many times higher than other brokerage firms, which tend to trade at less than 10 times lagging revenue. TD Ameritrade was worth 26 times its sales at the peak of the dotcom boom, shortly before that stock and the entire tech industry collapsed.
Robinhood has not yet announced a date for reporting its second quarter results. The company has already warned investors that customer and revenue growth could slow in the current quarter.
Write to Avi Salzman at firstname.lastname@example.org