On the first day of trading, the stock drops 8%
The public offering price of $38 per share is the low end of the IPO range. At that price, the company was worth $32 billion. When the U.S. consumer investing and trading app began to allow investors to trade its shares, they went down sharply, off more than 10% in the first hours of its life as a floating stock.
The day ended with a value of $34.82 per share, off 8.37% from the previous day. The company sold 55,000,000 shares in its IPO, generating gross proceeds of $2.1 billion, but that figure may rise if its banks purchase their available options. The company is well-capitalized to chart its future according to its wishes.
The stock went down due to a tension between growth and safety. We have seen a lot of big brand, consumer-facing tech companies in the last year, and you might be surprised that Robinhood didn't close the day up 80%. There were huge debuts for DoorDash andAirbnb.
A few things could be at play, including the fact that a big chunk of the IPO was made available to its own users. In practice, Robinhood gave its investors and traders shares at the same price and level of access that big investors were given to curtail early retail demand. It is a nice idea.
The early supply/demand curve may have been changed by the lowered retail interest in its shares. Some bulls may have been scared off by the company's warnings that its trading volumes could decline. In the stonk and meme-stock era, the downward debut of Robinhood is a bit of a puzzle.
We dig more into investor sentiment regarding the company's future performance as the company's stock finds its footing. We have more coming on the company's debut, including notes from an interview with the company's CFO."