Robinhood closed down more than 8% in its Nasdar debut, after pricing near the low end of its IPO range. It is the worst debut on record among 51 US firms that raised as much cash as Robinhood or more. Robinhood failed to win over some of the retail investors, it’s courting long-term growth.
Soon after HOOD began trading on Nasdaq, its shares down by around 12% from its opening price of a share of $38. It is one of the worst-performing IPOs in history, as Bloomberg reported.
The shares, which opened at $38 offer price, closed at $34.82 in New York, giving the company a market value of $29 billion. Many investors who used popular trading apps to participate in this year’s “meme” stock trading frenzy snubbed its IPO.
The IPO was also greeted by posting on Reddit. The Reddit platform helped drive trading of stocks such as Gamestop Corp. and AMC Entertainment Holding Inc. It urged would-be investors to avoid Robihood’s IPO simply.
The volatility is likely not surprising to certain market observers who were anticipating it because of the unique structure of Robinhood’s debut.
“It looks like nobody wants to touch it,” said Max Gokhman, head of asset allocation at Pacific Life Fund Advisors.
‘Hole’ in Floor
“Without any bids, there’s no floor beyond what the underwriters are willing to do, but when you release a third to retail and then say ‘No thanks’ you put a hole in the floor,” Gokhman said. “To be honest, when they priced at $38, I thought a flop was likely, but I didn’t expect it to be this bad.”
IN A BLOOMBERG INTERVIEW, Robinhood CEO Vlad Tenev said that he’s striving for a “large portion” of a company to be long-term investors.
Also Read: Robinhood To Debut on the NASDAQ With $32B IPO Valuation
“It’s a surreal moment,” Tenev,34, said shortly before Robinhood shares began trading on Nasdaq. “We’re not thinking about anything that happens in the market, especially in the short term.”
Tenev and co-founder Baiju Bhatt officially become billionaires with the IPO.
