After starting out as a dud, Robinhood’s newly minted public shares are giving traders on Reddit plenty of meme material.
The stock has perked up after initially drooping below the IPO price, with some 176 million shares changing hands yesterday, more than the previous three days combined, according to FactSet data. The frenzy sparked multiple exchange-trading halts as shares rocketed higher. The California-based brokerage’s stock has doubled in price to $70.39 from its public debut on July 29.
The trading momentum pushed Robinhood’s market capitalization to about double that of industry stalwart Nasdaq, the exchange operator, and to roughly the same as Swiss bank UBS, which has roots going back to the 19th century. Buying and selling of Robinhood appeared particularly energized by options linked to the company’s shares, which became available yesterday.
Retail traders have lately gobbled up options, which provide a cheap way to bet on a stock going up or down in price without having to actually purchase the shares. (Fittingly, the options market is where Robinhood makes most of its money.)
Some commenters on Reddit’s Wallstreetbets forum, an unofficial town hall for day traders and retail investors, have been sour on the brokerage’s IPO. But love it or hate it, posts and memes about Robinhood have garnered more than a thousand comments in the past 24 hours.
Many retail investors were incensed early this year when Robinhood restricting trading in GameStop shares, which were at the center of a battle between hedge funds and individual traders. Recent posts suggest some of the Wallstreetbets crowd still hold a grudge, even though Robinhood’s trading restrictions had more to do with market plumbing than some effort to protect the financial elites.
And despite concerns about Robinhood’s financial prospects, whether because of potential regulation or technology snafus, some of the retail set appear to be betting on the brokerage upstart. Robinhood was Fidelity’s most-traded stock yesterday, with buying outpacing selling.