Robinhood stocks closed the first week of trading down by 7.5% and it seems that it had the worst debut for an IPO of its size ever, as we can see more in our latest cryptocurrency news today.
A successful IPO day doesn’t mean that there will be future access because things like this happened to Facebook in the past. Robinhood could have driven the frenzy around the meme stocks like AMC, GameStop, and meme-coin Dogecoin but the investors were less interested in buying shares of the brokerage app itself. Robinhood’s IPO got off to a bad start when HOOD shares closed their first day of trading at $34.82 marking an 8.4% drop from their opening price of $38. HOOD clawed back one percent to close the week at $35.15, down by 7.5% from the IPO opening price.
The Robinhood stocks closed with a closing price for the week concluded a huge public debut for the company which was central to the retail investor revolution of 2020. Robinhood had the worst IPO debut and it even underperformed Pepsi, Uber, and MF Global. Back in 2019, Uber closed its day with shares down 7.6%, and in 2007, MF Global closed the debut session 8.2% down. Ahead of the IPO, Robinhood and some of the existing investors sold $55 million shares at the price between $38 and $42. For the IPO, the shares were priced at the bottom of the range and Wall Street Journal blames a huge part of the chilly debut on the company’s democratizing strategy.
Before the IPO, Robinhood earmarked 35% of shares for the Robinhood existing customers and in an IPO of this kind, the number is actually under 10%. The allocation fell to 20-25% when Robinhood went public and according to reports, many of the app’ users decided to pass on the offer of the company. Robinhood waived the six-month lockup for employees and allowed them to sell some of the shares right away and some did. The app’s disappointing debut doesn’t determine the future of the company because, with 18 million funded accounts, 9.5 million traded crypto in the app during the first quarter of the year, and Robinhood is still thriving.
The online brokerage company, Robinhood stocks debuted but saw a drop in share price in the 15 minutes after the launch. The initial price was set at $38 which put Robinhood at $32 billion valuations and thanks to the fast recovery, $HOOD is now sitting at $36. Today’s debut is the culmination of a long journey for Robinhood which became the trading app of choice for investors in the past few years.
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