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Robinhood share takes rollercoaster ride after market debut

By Ishika Dangayach on Jul 30, 2021 | 02:30 AM IST

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Robinhood Markets Inc, the trading platform which got a lot of light amid the GameStop saga, shares plummeted more than 10% after opening flat on the Nasdaq on Thursday, valuing the online brokerage at over $28 billion.

Shares of the company opened at $38 and fell to a low of $33.35. The company has regained some of its losses and is currently trading at $36, down roughly 5% from its offer price around 2:16 PM ET. 

The firm, arguably the breakthrough financial technology startup of its time priced its IPO on Wednesday and garnered $2.1 billion.

Its long-awaited debut comes months after it got caught up in a battle between retail investors and Wall Street hedge funds.

The popular online brokerage took an unprecedented step of enabling users of its trading app to purchase up to one-third of its IPO shares before they trade on the Nasdaq under the ticker symbol HOOD on Thursday. Generally, institutional investors and business insiders may often purchase shares in a company before it goes public.

In 2020, Robinhood's revenue increased by 245 percent to $959 million. It subsequently more than quadrupled from the previous year's level to $522 million in the first three months of 2021.

The firm was compelled to raise $3.4 billion in emergency financing after its finances were stretched by the enormous increase in retail trading.

Vlad Tenev and Baiju Bhatt, roommates at Stanford University launched the business in 2013. The two will have a majority of the voting power, with Bhatt owning around 39 percent of the outstanding stock and Tenev approximately 26.2 percent.

According to the documents, the business has around $12 billion in cryptocurrency assets as of March 31, 2021. This is 23 times more than the value of its crypto assets in 2020. During the same time period, more than 9.5 million users exchanged about $88 billion in bitcoin on Robinhood's platform, Money Control reported.

The company intended to reserve 20% and 35% of its offering for users of its trading platform, which allowed users to make unlimited commission-free transactions in stocks, ETFs, options, and cryptocurrencies.

Moreover, the Trading service provider is planning to introduce a new feature that would let traders invest spare change and help protect users from crypto price volatility.

The upcoming feature will be called “round-up investments,” which was found as a hidden code inside a version of its iPhone app distributed to beta testers earlier this month and was discovered by iOS developer Steve Moser.

With inputs from Reuters 

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