By Oliver Smith on Friday 30 July 2021
Fintech experienced the kind of volatile trading that has been its hallmark in enabling the meme stock movement.
Shares tumbled as much as 10 per cent in the first few minutes of trading, eventually recovering slightly to close the first day down 8.37 per cent.
The drop knocked Robinhood’s expected $32bn valuation to below $29.4bn, with its shares closing at $34.82, well below the $38 they were priced at.
Robinhood had surged in popularity earlier this year after becoming the favoured tool of Reddit group Wall Street Bets who used it to boost the stock prices of AMC and Gamestop, but Robinhood subsequently faced fines and regulatory pressure for its reliability and earlier outages.
The group had priced its shares at the low end of its IPO range of $38-$42, but clearly volatile trading, for which it has become so well known for enabling, turned around to bite the fintech.
Still, the float was a success for the company as it raised close to $2bn, with co-founders Vlad Tenev and Baiju Bhatt both selling about $50m worth of shares.
“Six years ago, we launched with a mission to democratize finance for all. Today, Robinhood begins a new chapter as a publicly listed company,” the duo said yesterday.
“We’ve only begun to scratch the surface of what’s possible, and have much further to go to truly democratize finance for all.”