Robinhood surges 50% in frenzied trading, as investors scoop up ‘the meme of memes’
BENGALURU (REUTERS) - Shares of Robinhood Markets rose more than 50 per cent on Wednesday (Aug 5) during a wild trading session as investors scooped up shares after its underwhelming stock market debut last week. The online brokerage's shares closed at US$70.39, off the session high of US$85 when the stock was up nearly 82 per cent, with one analyst dubbing it "the meme of memes" in a reference to stocks popularised this year by retail investors congregating in online platforms such as Reddit's WallStreetBets. The stock has risen far above its initial public offering price (IPO) of US$38 per share and has logged its fourth straight day of gains. Its market capitalisation rose to US$58.8 billion (S$79.5 billion), catapulting it ahead of Twitter, restaurant chain Chipotle Mexican Grill and asset manager T. Rowe Price. Interest in the stock among retail investors soared on social media despite its weak market debut last week, when it fell below its IPO price. It was unclear exactly how much of Wednesday's buying was from retail investors, though. On Tuesday, retail trading volume rose tenfold, helping the stock gain 24 per cent, according to Vanda Research. Over the past 24 hours, Rob...
Robinhood closes more than 8% down in grim stock market debut
NEW YORK (REUTERS) - Robinhood Markets' shares closed more than 8 per cent lower at US$34.82 per share on their first day of trading, as many investors who used the popular trading app to participate in this year’s “meme” stock trading frenzy snubbed its initial public offering (IPO). Only 16 of the 99 US-listed companies that were worth at least US$10 billion (S$13 billion) when they went public declined on their first day, according to Dealogic, whose data goes back to 1995. “A year ago we were trading the stock at 15 bucks a share. And our most recent trades in early June were US$55 a share (in the private market),” said Glen Anderson, president of Rainmaker Securities, a secondary trading platform for private pre-IPO shares. Anderson said they traded about US$200 million in Robinhood stocks in the private market last year. Robinhood’s easy-to-use interface has made it a hit among young investors trading from home on cryptocurrencies and stocks such as GameStop during the Covid-19 pandemic. Some IPO investors stayed on the sidelines, citing concerns over its frothy valuation, the risk of regulators cracking down on Robinhood’s business, and lingering anger with the company’s imp...
Robinhood, gateway to ‘meme’ stocks, raises $2.85 billion in IPO: Source
NEW YORK (REUTERS) - Robinhood Markets, the owner of the trading app which emerged as the go-to destination for retail investors speculating on this year's 'meme' stock trading frenzy, raised US$2.1 billion (S$2.85 billion) in its initial public offering (IPO) on Wednesday (July 28). The company is seeking to capitalize on individual investors' fascination with cryptocurrencies and stocks such as GameStop, which have seen wild swings after becoming the subject of trading speculation on social media sites such as Reddit. Its monthly active users surged from 11.7 million at the end of December to 21.3 million as of the end of June. Robinhood sold 55 million shares in its IPO at US$38 apiece, the bottom of its targeted price range of US$38 to US$42, a person familiar with the matter said on Wednesday. In an unusual move, Robinhood had said it would reserve between 20 per cent and 35 per cent of its shares for its users. The IPO values Robinhood at US$31.8 billion. It makes it one of the most valuable US companies to have gone public year to date, amid a red-hot market for new listings. The source requested not to be identified ahead of an official announcement. Robinhood did not immed...
Robinhood’s core business more than triples in Q1 amid meme-stock frenzy
NEW YORK (BLOOMBERG) - Robinhood Market's largest source of revenue - payment for order flow - more than tripled in the first quarter as the trading app became immensely popular with young investors amid the meme-stock frenzy. Revenue from "payment for order flow," a system where market makers like Citadel Securities pay retail brokers including Robinhood for routing orders to them, reached about US$331 million (S$440.3 million) in the first quarter, up from US$91 million a year ago, according to a securities filings last week cited by the Wall Street Journal. The brokerage last year took in about US$687 million from such payments, according to data from regulatory filings compiled by Bloomberg Intelligence. Robinhood co-founder and chief executive officer Vlad Tenev had testified that the practice is the company's largest source of revenue. The arrangement is commonplace and disclosed in the brokerage industry, but has been controversial as it may give brokers an incentive to push their customers to trade more often. The app popularised the zero-commission brokerage and introduced millions of millennials and Gen Zers to the market. Critics including US lawmakers and a state securi...
Robinhood, at the heart of retail trading frenzy, files for IPO
BENGALURU (REUTERS) - Robinhood Markets, the online brokerage at the centre of the historic retail trading frenzy that gripped Wall Street this year, has confidentially submitted plans to regulators for a US initial public offering (IPO), the company disclosed on Tuesday (March 23). The move to push ahead with a stock market flotation comes in the middle of a historic boom in US capital markets, fueled largely by dealmaking through so-called special purpose acquisition companies (Spacs). Companies have raised well over US$100 billion (S$134.6 billion) through IPOs in the first three months of the year and are poised to overtake 2020's record haul of US$167 billion, data from Refinitiv and Dealogic showed. The amount raised includes blank-cheque IPOs. Reuters reported in December that Robinhood had picked Goldman Sachs Group to lead preparations for a stock market flotation. The company is yet to determine the number of shares to be offered and the price range, it said in a blog post. Robinhood had considered going public through a direct listing in the weeks leading up to the filing, people familiar with the matter said. In a direct listing, a company does not sell any shares in ad...
GameStop plunge wipes out US$11 billion as platforms curb trades
NEW YORK (BLOOMBERG, REUTERS) - GameStop snapped a dizzying six-day rally to wipe out nearly US$11 billion (S$14.6 billion) in market value on Thursday (Jan 28) after moves by brokerages to curb trading of the stock on their apps whipped up volatility and enraged the company's retail fanbase. The stock plunged 44 per cent during regular trading hours after Robinhood Markets, Interactive Brokers Group, E*Trade Financial and others took steps to curtail activity in several high-flying stocks, including GameStop and AMC Entertainment Holdings. The video-game retailer on Thursday triggered 19 volatility halts on its way to shedding more than twice what it was worth on Monday. Volume also fell, with about 55 million shares traded by Thursday afternoon, a far cry from Friday's record of 197 million. But in the latest turn of the GameStop roller-coaster, its shares surged 34 per cent in after-hours trading on Thursday after Robinhood said it would allow its customers to resume trading on the company. The earlier trading curbs resulted in howls of outrage on Reddit's WallStreetBets forum, which has been the launching point for many of this week's blistering rallies, and Robinhood was hit b...