Robinhood was off to a rocky start last week on its first day of trading, but its fortunes have turned
Shares in Robinhood have surged, climbing as much as 82 per cent. The volatility led to Nasdaq pausing trading several times to accomodate for the wild price swings.
It comes less than a week after the Californian-based company listed in a disappointing IPO. The app’s commission-free transactions has attracted investors who have ample time and money to spare during the pandemic.
Yesterday’s gains have lifted the platform’s market valuation above hundreds of blue-chip companies such as Ford and Heinz.
Robinhood shares are up nearly 65% https://t.co/Allh5Fh5kp pic.twitter.com/QXZPegLkqB
— Bloomberg Markets (@markets) August 4, 2021
Social media frenzy
But this week’s reversal reflects retail investors embracing the stock on social media and the availability of options tied to Robinhood’s shares. There is speculation the firm could be seeing the same frenzied trading that surrounded the video game retailer Gamestop.
Momentum has also sped up as some big-name investors have bought in. this includes Cathie Wood, who manages the investment fund Ark Invest.
There was “considerable cheering for Cathie” Wood on Reddit said Ivan Cosovic, founder of Breakout Point.
Meme stocks
Robinhood is a trading hub for meme stocks, which blew up earlier this year. Users of the platform used social media platforms such as Reddit to organise buying up stocks from GameStop and AMC.
Mentions of ‘Robinhood’ blew up on Reddit yesterday morning. Investors rallied around the goal of a $60 share price, a huge jump from $35.15 on Friday.
