Meet the New Meme Inventory: Robinhood Rises 82% – WISH-TV | Indianapolis Information | Indiana climate
(CNN) – Robinhood has benefited from the meme stock craze. Now Robinhood is becoming the next retail toy itself.
Robinhood’s shares rose as much as 82% early Wednesday – although the controversial trading company that debuted on Wall Street just last week didn’t announce any new developments.
Robinhood rebounded so strongly that trading was interrupted several times due to the volatility. In the last trade, Robinhood rose a more modest 30%.
The frenzy comes after Robinhood closed 24% higher on Tuesday and eventually broke above its $ 38 price.
Robinhood is suddenly attracting a lot of interest from retail investors – including WallStreetBets, the army of traders behind the GameStop surge earlier this year.
“Robinhood has grown as a Meme stock from the start,” said Max Gokhman, head of asset allocation for Pacific Life Fund Advisors. He pointed out how Robinhood took the unusual step of selling a large chunk of its stock to users and making its roadshow available to the public.
“When that happens, we should expect breathtaking price movements every day with no news,” said Gokhman.
Robinhood is by far the most talked-about stock on WallStreetBets in the past 24 hours, according to Swaggy Stocks, which is tracking mentions on the Reddit page. Robinhood accounted for more than a quarter of all ticker mentions on WallStreetBets.
Thinknum Alternative Data, which is tracking WallStreetBets’ mentions for hedge funds and banks, found that Robinhood’s mention volume is double that of AMD, the second most frequently mentioned stock on the site.
Reddit’s focus on Robinhood is “pretty amazing,” said Justin Zhen, co-founder and president of Thinknum, adding, “The interesting thing is that a lot of the sentiments are actually negative.”
Against this background, the retail volume increased tenfold on Tuesday, Reuters reported, citing Vanda Research.
Robinhood also benefits from the support of a closely watched fund manager. Cathie Wood’s Ark Innovation ETF has announced significant and growing acquisitions from Robinhood in the past few days.
“Many private investors trust Cathie and see her as their general,” said Gokhman.
All of this is in stark contrast to Robinhood’s rocky start in life as a public company.
Robinhood saw its IPO at the lower end of expectations and then quickly fell sharply after starting trading on the Nasdaq last week. The stock ended its first day down 8% and didn’t get the first-day pop that new companies covet.
Robinhood has benefited more than any other company from a surge in retail trade. Robinhood’s revenue rose 245% to nearly $ 1 billion last year as user growth soared.
Robinhood has also benefited from the meme stock phenomenon, which saw GameStop, AMC, and other consumer-focused companies see major gains despite minor fundamental changes.
Robinhood didn’t seem very popular with traders on Reddit before going public, however. Comments on the website’s popular WallStreetBets forum indicated that many individual traders are angry with Robinhood and some even threatened to sell it.