Robinhood’s share price falls after IPO

Robinhood Markets Inc., the trading app synonymous with hot stocks, received a chilly reception from investors on its own stock market debut.

The investment app fell on its highly anticipated commercial debut on Thursday, closing 8.4% below its initial public offering price. Robinhood shares opened at $ 38, matching the IPO price, and quickly fell more than 10%. Later, the stock rose to get closer to the IPO price before falling again in the last hour of trading to close at $ 34.82.

It was a disappointing debut for the company that brought the markets to the masses. Robinhood and his bankers tried to avoid a poor performance on the first day by setting the stock price at the bottom of their target range at a value of about $ 32 billion. A successful first day was even more important because Robinhood sold a large portion of its stock to its own clients.

Breaking the Wall Street convention of giving individual investors only a miniscule portion of hot IPOs, Robinhood sold between 20% and 25% of its offering to its clients, according to people familiar with the matter.

“One of our company’s values ​​is ‘participation is power,'” Chief Executive Vlad Tenev said in an interview. “It didn’t seem right to us that IPOs would have been normally reserved for the top 1%.”

Source: WSJ

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