Robinhood shares down 7.5 pc last week%

Robinhood may have spurred the sale of “meme stocks” such as Gamestop, AMC and meme-coin Dogecoin, but investors are less interested in stocks in the most popular stock and cryptocurrency trading app.  

Robinhood’s IPO got off to a disappointing start on Thursday, with HOOD shares closing the first day of trading at $ 34.82, down 8.4% from its opening price of $ 38. On Friday, Hood returned just one percent to close the week at $ 35.15.

The week’s closing price marks the debut of the platform, which was at the centre of last year’s retail investor revolution.

Robinhood had the worst exit for an IPO of this size, leading to Uber, Pepsi and MF Global in the first deal. In 2019, Uber closed its first day with a 7.6% drop, and in 2007 MF Global closed its first session with an 8.2% drop. 

On Wednesday, Robinhood and a number of existing investors sold 55 million shares at prices ranging from $ 38 to $ 42 Dec. At the time of the IPO, the shares were valued at the lower part of that December. 

The Wall Street Journal largely blames Robinhood’s cold start on the company’s strategy of “democratizing” retail trade. 

Prior to the IPO, Robinhood reserved 35% shares for existing Robinhood customers. In such an IPO, the number is usually below 10%. That distribution dropped to 20-25% when robinhood officially went public, according to the WSJ, as many app users decided to drop the company’s offerings.

Robinhood also abandoned the usual six-month lockdown for employees, allowing them to sell some of their shares immediately; frankly, some did. 

The disappointing start to practice in no way decides its fate. With 18 million funded accounts, 9 million of them traded cryptocurrencies in practice in the first quarter of this year, Robinhood is still thriving.

Facebook shares also struggled in their debut. Look how it happened.

Author’s opinions and opinions are for informational purposes only and not financial,

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