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Robinhood, the app that steals from the poor to give to the rich, had a pretty poor IPO debut last week. After opening at $38 a share, the bottom of the target range for the listing, it slid almost 12 per cent in its first day trading before ending the day down some 8 per cent at $34.
For a year in which most IPOs have popped, bar a certain UK-based labour arbitrage company, it was pretty weak sauce. One mooted reason for the drop was the offering’s allocation: 35 per cent of the shares were set aside for its own customers who, as we know too well from this year’s turbulent market action, tend not to be so diamond handed when the music stops. The idea’s even been floated that the r/WallStreetBets crowd had purchased, then sold, the stock as revenge for the GameStop saga. (Or whichever popular stock had recently crashed.)
It seems there’s been a change of heart.
On Tuesday, Robinhood’s shares were up 24 per cent. Just before opening bell strikes on Wall Street, they’re up another 14.7 per cent to $53.98. Some 40 per cent above the IPO price of last Thursday:
It might not be much of a surprise to our readers. After all, what stock is better suited to becoming a meme stock than Robinhood, the app that arguably turbo-charged this period of retail mania, itself?
At an enterprise value now of $45bn, roughly 17 times its estimated sales for 2022, we wonder if there’ll be any other takers for the stock that enables the stonks.