With a valuation of 35 billion Robinhood wanted to sell US dollars on the Nasdaq tech stock exchange. The stock exchange traders weren’t quite as enthusiastic as they had hoped. In the run-up, a price range between 38 and 42 dollars had been targeted, in the end it went to the trading floor with 38 dollars. That started Robinhood with an overall valuation of $ 32 billion. For comparison: In the fall of 2020, the last financing round, it was 11.7 billion dollars.
Robinhood share under pressure on first trading day
In the course of the first trading day, the share was meanwhile downhill by ten percent to below 34 dollars. Shortly before the stock market closes on Thursday afternoon, New York time, the paper is just below the $ 35 mark. This is astonishing as in the past few months stocks have mostly risen sharply on their first day of trading, as the Handelsblatt writes. So what happened?
One possible explanation for the disappointing stock market start lies in the expected high volatility of the new stock – something that investors don’t like. Robinhood has issued a comparatively high proportion of its shares to small investors. It is possible that they want to cash in quickly. Another damper could be due to a new investigation by the financial regulator Finra, which Robinhood only announced on Tuesday.
Analyst: Robinhood “hottest iron on the stock market”
At the end of June, Robinhood had paid Finra $ 70 million in a settlement – the highest payment in the agency’s history. Various other investigations into possible violations are also pending. So it’s no wonder that analyst Konstantin Oldenburger from the online broker CMC Markets described Robinhood to the Handelsblatt as “probably one of the hottest irons on the stock market”, “on which investors could burn their fingers”.
Robinhood can look forward to around 2.1 billion dollars, which the IPO of the trading app flushed into the coffers, despite possible disappointment. Among other things, this is intended to finance the planned international expansion. In addition, Robinhood CEO Vlad Tenev told CNBC, the company wants to make itself less dependent on trade revenues in the future. Rather, Robinhood should become an app that deals with all aspects of money, not just investing.