Robinhood stock price plummets after IPO الا

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Robinhood Markets Inc. is down. The app that brought markets to the masses, in its first trading Thursday after raising nearly $2 billion in one of the most anticipated initial public offerings of the year.

The company’s stock, listed on Nasdaq under the symbol HOOD, opened at $38 on Thursday afternoon, in line with the initial offering price, and was quickly down more than 10%. The stock later recovered, and recently traded below the IPO price of $37.44.

The poor performance on the first day is what Robinhood and insurers have tried to avoid by pricing the shares below their target range of about $32 billion. The company and bankers wanted to be conservative to ensure a successful first trading day, according to people familiar with the matter, in part because Robinhood sold a large portion of its stock to small investors.

Robinhood cut off a Wall Street agreement to give retail investors only a small slice of hot IPOs, and said it would allocate up to 35% of its offerings to its users. In the end, Robinhood’s clients took between 20% and 25% of the IPO, according to people familiar with the matter.

Robinhood’s brokerage app has revolutionized the retail business. The Wall Street Journal explains its rise amid a series of legal investigations and regulatory challenges as it looks to go public. Image caption: Jacob Reynolds/Wall Street Journal

“One of the values ​​of our company is ‘Sharing is Strength,’” CEO Vlad Tenev said in an interview.

This decision could lead to more volatility in trading in its first day as a public company. When Facebook Inc. A public company in 2012, it sold about 25% of its initial public offering to individual investors. The stock fell a day after trading began and took over a year to close back above the IPO price.

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Robinhood is trying to prevent a similar outcome by discouraging users from immediately dumping shares they received in its initial public offering. The company has warned users that they could be banned from participating in future public offerings on Robinhood if they sell their shares within the first 30 days.

So far this year, billions of dollars have poured into the IPO market, with traditional US-listed offerings rushing to raise more money than in any previous year, according to Dealogic.

But some deals have fluctuated in recent weeks. Xponential Fitness Inc. Last week it priced the initial public offering by $2 below the lower end of the target range. Clarios International Inc. its initial public offering this week, citing market conditions. It was intended to raise approximately $1.7 billion.

Robinhood’s Stock Market debuts

Write to Peter Rudegeair at [email protected] and Corrie Driebusch at [email protected]

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