Robinhood Markets Snubbed by Investors on Nasdaq Debut

Commission-free trading app Robinhood is officially a publicly traded company, but investors did not roll out the welcome mat for the stock. Shares of Robinhood, which trade under the symbol “HOOD,” opened at USD 38 per share on the Nasdaq before falling to around USD 33. The new stock managed to recover some of those losses and is down 5% at the last check, which is better than the close to 10% declines it suffered earlier in the session.

Source: TradingView

Isn’t It Ironic?

There has been a great deal of hype surrounding the Robinhood app, for several reasons, chief among which was its decision to earmark shares for its users. Robinhood pledged more than one-third of its float for customers of the trading app, which is on the generous side. A typical IPO will reserve less than 10% for retail investors as hedge funds and other big investors tend to get first dibs.

Individual investors have seemingly not returned the favor to Robinhood, leaving the mobile trading app hanging on its stock market debut. It could have gone either way. Robinhood was hoping to mend the fences between itself and jilted retail investors who were left holding the bag after the broker placed trading restrictions on popular meme stocks, including GameStop and AMC Entertainment.

The massive buying in GME And AMC by the Reddit WallStreetBets crowd in early 2021 pressured short-sellers, mainly hedge funds, and Robinhood caved to the pressure. The broker has since lifted those trading restrictions. Apparently, all is not well that ends well, however, if Robinhood’s stock price on day one is any indication. Social media members couldn’t resist the irony of the situation.

Celebrity Backers

Robinhood is kicking off its future as a public company with a market cap of USD 34 billion. A couple of astute backers who timed it right are Nas and Snoop Dogg, who invested in the trading app in 2014 when the company had a value of USD 62 million attached.

NBA champion Kevin Durant and his manager Rich Kleiman are probably not complaining either. They placed a bet four years ago through Thirty Five Ventures, the VC firm Drant and Kleiman co-founded.

Their return on Robinhood is reportedly in the ballpark of 2,500%.