- Robinhood (NASDAQ: HOOD) stock opens trading at $38, the exact level as its IPO price
- The stock price dropped 11% in early afternoon trading from $38 to $34
- Market experts warn day traders against rampant speculations and taking up debts
July 29, 2021: Robinhood IPO has possibly been the most eagerly awaited initial public offering of the year. However, sceptics speculate the HOOD stock to be nothing more than an ‘online gamble.’
Robinhood’s buzzy IPO has finally debuted in the market today and has begun to trade under the ticker HOOD. The company priced its IPO at $38 per share and opened near that level. While the hype was huge and the stock price was anticipated to go up, it dropped by 11% to $34 in the early trading hours itself, which was at the lower end of its IPO range.
The Unique and Unusual Robinhood IPO
In an unusual move, the company reserved 20% to 35% of its shares for its users; Generally, companies do not offer their shares directly to regular investors because they are reserved for wealthier brokerage clients and institutional investors (like mutual funds, hedge funds, endowments, etc.). However, the move can be observed as Robinhood’s attempt to give retail investors better access to IPO’s.
Another unusual approach with Robinhood’s IPO is the limitations for insiders to sell. Generally, investors are obligated not to sell for six months or more, but the company has enabled investors to sell up to 15% immediately, and another 15% after three months, which means an upward pricing factor typically seen is absent in the stock. To these unusual moves, Josh Brown, CEO of Ritholtz Wealth Management asserted, “A lot of this really started out as regulatory arbitrage.”
Robinhood’s ‘Startup and Immature Mentality’
Speculations speak that the company has received severe scrutiny from regulatory agencies. On July 28, Robinhood disclosed that they received requests for information about FINRA registration of its co-founders, and about trading meme stocks like GameStop by company employees. Moreover, the company was hit by a $70 million penalty by the Financial Industry Regulatory Authority (FINRA) in June for its outages and failures relating to option trading practices.
Trending Stories
Sceptics also proclaim that even though Robinhood is set to go public as a mature company, the startup mentality of Stanford roommates is barely in the rearview mirror. Many experts also seem to be wary about the IPO and have warned the retail investors to approach every IPO cautiously.
- Do Kwon Says Terra Collecting Snapshot Data For LUNA Airdrop
- Top ETH Whales Add These DeFi Tokens Amid Crypto Volatility
- Here’s Why Bitcoin (BTC) Could Be In for Another 50% Correction Under $15,000
- Another Top Exchange To Delist Terra UST Over Collapse
- Just-In: Vitalik Buterin No Longer A Billionaire As Ethereum Crashes
- Bitcoin Price: Key Metrics Show Surprising Insights
- After Terra Crash, Galaxy Digital CEO Warns Against Bottom Buying
- Shiba Inu (SHIB) Prices May Jump Next Week; Here’s Why
- Is Andre Cronje Back On Fantom? FTM Jumps 13%
- PlanB Says Bear Market Almost Over, Bitcoin (BTC) In Buying Range
- Zilliqa Price Analysis: Channel Breakout Hints ZIL Price to hit $0.1
- Bitcoin Price Analysis: Trapped Bullish Momentum Need Triangle Breakout
- FTM Price Analysis: Buyers Tease Breakout From Long-Coming Trendline
- GALA Price Analysis: High Momentum Fallout Warns $0.075 Fallout
- Solana Price Prediction 2022: Bulls to drive SOL Price to new Highs?
- Theta Price Prediction 2022 : Analysts Insights into the crucial Reversal levels
- Sandbox Price Prediction 2022 : Analysts Show Optimism Towards The Metaverse SAND Token
- Apecoin Price Prediction 2022 : The future of Web3 and NFTs ?
- Ethereum Classic Price Prediction 2022 : Here’s What to Expect from ETC Price ?
- SAND Price Analysis: SAND Buyers Await Trendline Breakout To Go Long