The trading app developed by Robinhood Markets Inc (NASDAQ:HOOD) made its name as the trading platform of choice of those dealing in so-called meme stocks.
Now, almost inevitably, Robinhood itself has become a meme stock.
Oh, how we smiled when the company saw its shares tumble on their first day of trading even after the much-hyped initial public offering (IPO) was priced right at the bottom end of the indicated pricing range.
The stock, floated at US$38, fell to US$34.82 on its first day of trading but as in all the best Robin Hood adventures, when things looked bad, there has been a surprise turnaround.
Granted, the surprise normally comes at the end not halfway through the first reel of a three-reel film but with the shares now trading around US$60 on the company’s fifth day as a publicly listed company, those who punted on the stock won’t be complaining.
The app’s users bought about around a quarter of the shares on offer in the flotations, according to the Bloomberg news agency.
At one point today, the stock topped US$80 but in volatile trading, we have seen a ding-dong battle between believers and sceptics. The stock is the second most heavily traded stock on US exchanges and at one point, trading was so volatile that a time-out was called to enable investors and market makers time to gather their thoughts.
A stock for brave hearts
That must have irked the app’s users somewhat.
You can take away our freedom but you – hang on, that is the wrong film about a British semi-mythical hero portrayed by a bankable (non-British) actor.
Then again, one conspiracy theory says that the app’s users only clamoured for stock in the IPO so they could dump it in revenge for Robinhood blocking trades of meme stock favourite GameStop in February.
Reddit traders who said they would short tf out of Robinhood loading up on the stock this morning pic.twitter.com/N7WuoPraAj
— litquidity (@litcapital) August 4, 2021
Some people apparently still have not got over the GameStop controversy.
I don’t care if Robinhood goes to $1000/share. It’s still worthless to me.
— Matt kneram (@matt_kneram) August 3, 2021
Others seem to have a sense of humour about it.
When is Robinhood going to halt buy orders on $HOOD???
— litquidity (@litcapital) August 4, 2021
GameStop and AMC watching Robinhood get the memestock treatment from wall street bets pic.twitter.com/jfPDhwZzHC
— Morning Brew ☕️ (@MorningBrew) August 4, 2021
In the time it has taken me to write this article, the shares have rallied to US$62.38, which is up 34% on the day.
In anyone’s language, that’s a stonking gain.