Robinhood’s long-awaited debut on the Nasdaq stock market took place on Thursday. But it didn’t quite go according to plan.
Around 12:30 a.m. EDT (5:30 p.m. BST), the shares began trading at $ 38, the bottom of their range from $ 38 to $ 42. By 12:35 p.m., the stock price had dropped 9%.
The stock price bounced back after its immediate fall, but by the time the closing bell rang at 4pm, Robinhood shares had fallen more than 8%. Its closing price of $ 34.82, giving Robinhood a market capitalization of $ 29 billion.
Despite its disappointing first day, Robinhood shares were on Thursday one of the most traded shares in the U.S., with more than 100 million shares bought and sold. According to reports, the same company sold 52.4 million shares, reaching nearly $ 2 billion in the process.
Source: Admirals MetaTrader 5 – Robinhood M1 Chart. Representation Date: July 29, 2021. Capture Date: July 30, 2021. Past performance is not a reliable indicator of future results.
Robinhood, which aims to “democratize investment” by eliminating account minimums and brokers ’commissions, has risen in popularity since the beginning of the pandemic, as many younger traders signed up for the broker.
Unlike some of the other recent technology IPOs, Robinhood enjoyed a profitable year in 2020, with a net profit of $ 7.45 million and a net income of $ 959 million.
However, despite these positive factors, many investors remained wary of the company’s shares amid concern over its $ 31.8 billion valuation and ongoing issues with U.S. regulators.
Last month, the Financial Industry Regulatory Authority fined Robinhood $ 70 million for issuing “false and misleading” communications to its customers. They also received a $ 65 million fine from the Securities and Exchange Committee (SEC) in 2020 for misleading clients.
In addition, the company’s main source of revenue comes from the controversial order flow payment practice, which basically sells its customers ’operations to market makers. There are concerns that this practice will be targeted by regulators after SEC President Gary Gensler criticized it.
Questions also remain about whether Robinhood can maintain its high levels of growth in a post-pandemic world. Much of its recent success can be attributed to the fact that Covid-19-induced blockages have kept many of us at home, looking for new ways to pass the time. Once the world opens up again, will your target audience of young people maintain their interest in the world of investment?
Invest with admirals
If you think the first day of Robinhood presents an opportunity, please be aware that with an Admirals Invest.MT5 account you can buy shares of Robinhood and more than 4,300 listed companies around the world. Other benefits of the Invest.MT5 account include:
- Open an account with a deposit of only € 1
- Free use of the world’s number one multi-active trading platform, MetaTrader 5
- Exclusive access to our Premium Analytics portal, where you can find the latest news, market sentiment and technical information.
With the Admirals Trade.MT5 account, you can change Contracts for Differences (CFDs) to Robinhood and more than 3000 shares. CFDs allow traders to try to benefit from bullish and bullish markets, as well as the use of leverage. Click on the following banner to open an account today:
Sometimes we include links to online retail stores. If you click on one and make a purchase we may receive a small commission.