Robinhood's Debut on NASDAQ as "Apes on WallstreetBets" Keep Off.
The Reddit Wars against Robinhood is now in the Market, will they finish it?
Robinhood markets Inc, the U.S tech giant known for decentralizing access to the stock exchange has finally listed its shares on the Nasdaq Exchange in the United States.
The trading platform had offered investors 55 million shares as it targeted to raise $2.1 billion in the initial public offering (IPO). Co-founders Vladimir Tenev and Baiju Bhatt each sold about 1.25 million shares, while Chief Financial Officer Jason Warnick unloaded 125,000 shares. Tenev and Bhatt will be getting a combined $95 million from the sale of shares.
The primary business of Robinhood [RH] is to receive orders from investors and send them to brokers for execution. In the next phase of expansion, Robinhood aims to have its users’ access IPO which is currently on test for select investors through the feature dubbed IPO access.
After months of waiting, Robinhood finally informed investors on Wednesday, Robinhood that it would price the initial public offering (IPO) shares at $38 a share, at the low end of its estimated range, valuing the company at just above $32 billion. Robinhood will be trading under the ticker [NASDAQ: HOOD].
Well, depending on which side of the divide you stand on, the stock trading app Robinhood will seem to you to have either democratized trading on Wall Street trading or launched a generation of unsavvy investors who have become addicted to the promise of quick cash.
Robinhood Vs Reddit Bro’s
Robinhood markets and the famous Reddit group r/wallstreetbets began when the market maker decided to limit the number of trades of the much-hyped Gamestop and AMC stocks frenzy. At some point RH only allowed investors to close positions.
Reddit investors have also criticized the company for the many outages which have caused them from missing either entry or exit opportunities on the markets. Despite a wave of criticism, not every Reddit poster has attacked Robinhood, a few investors have been supportive of the company and actually indicated that they would buy in, with hopes of a take over of the company by a larger entity in years to come. This is likely to rally the share price above the IPO price.
Reddit forum investors since started a massive campaign for its investors (who mostly use Robinhood) to boycott the App’s IPO. Even if they did, they had threatened to bring the trade market cap of the company down! This could be one of the reasons why RH Markets priced their IPO price to the lowers valuation of between $22 to $38.
Robinhood IPO Success
As at market open on Thursday on the Nasdaq, Robinhood opened trading at $38 per share with strong downward resistance, indicating that the share price could rally even further. The share price had at open experienced a drop of $3.74 per share and hitting a low of $34.26 per share.
Nevertheless, you should be cautious when investing in IPOs, most of the time, companies would drop in prices on IPO before finally doing a greater market valuation and analysis. For instance, the most recently known IPO of Didi Global Inc has turned out to be tragic, dropping by over 52% in pricing since listing.
Hisa is working on bringing you access to U.S Stocks, be part of our early adopters by downloading the Hisa App from Google Playstore or App Store on iOS