Robinhood I.P.O.: Shares Fall After Opening at $38
SAN FRANCISCO – Robinhood helped propel a “memes stocks” frenzy earlier this year that sent small business share prices up a roller coaster. On Thursday, its own initial public offering was much more subdued.
The stock market startup’s shares opened at $ 38, the same price as its bid, but then fell. Its offer price, which valued the company at $ 31.7 billion and was at the low end of its proposed range, showed investors may be reluctant to embrace the company’s grand mission of upsetting Wall Street.
Robinhood’s free stock trading service has helped create the conditions for wild trading gyrations in so-called stock memes, which are driven by investors promoting their trades on social media. The company, which is on a mission to democratize finance, has also decided to sell up to a third of its offering to retail traders through its own app, adding to the unpredictability of initial trading.
Its offering is among the largest in a frantic year for public market debut, though few companies have had the profile and level of controversy – including blackouts, fines, congressional hearings. , protests and memes – like Robinhood.
The list shows that there can be limits to investor euphoria for IPOs, even in the middle of a successful year for them. The first half of the year saw 213 initial public offerings, more than any full year in the past decade, according to Renaissance Capital, which tracks IPOs. This week alone, 25 companies are expected to go public in the United States, making it the most active in two decades. Instacart, the grocery delivery company, and Nextdoor, the social network, are among those expected to be released later this year.
Vlad Tenev, CEO and co-founder of Robinhood, said in an interview that the IPO was a “celebration of the individual investor in America.”
Mr. Tenev stressed the importance for Robinhood to offer a large part of the stock to its customers. “We just realize that this is an important time for our customers as well,” he said.
About 20% of the offering was sold to customers, according to a person familiar with the offering, who was on the low end of the range Robinhood was planning to sell and indicated less interest than expected.
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