By Jasper Hamill
The crypto-inclusive investment platform Robinhood has suffered a historic stock price drop after making its debut on the Nasdaq the week of July 26th. But is a recovery on the way?
Shares in Robinhood (HOOD) experienced a dramatic plunge after its IPO, with stock listed at $38 before plummeting 8.4% on the first day of trading. It’s price did rebound and is sitting at just under $35 at the time of writing.
Named after a mythical British hero who stole from the rich and gave to the poor, the investment website became famous for powering investment in meme stocks – shares in companies that have experienced some kind of viral buzz. The most famous of these was Gamestop, which experienced a stock price explosion driven by hype on Reddit and other platforms.
Robinhood also offers crypto trading but does not allow investors to withdraw their holdings directly, although crypto can be sold and converted into fiat.
The apparently disastrous launch was hailed as the worst IPO ever among firms that raised as much money as Robinhood.
Data from the financial analysis firm Dealogic revealed that just 16 of the 99 US companies listed at $10 billion declined on the first day after an IPO.
However, the two founders of Robinhood are now stratospherically wealthy with a net worth of more than $4 billion combined.
As Robinhood floated on the Nasdaq, co-founder Vlad Tenev shared the remarkable story of how he became a billionaire.
“When I was five years old I came to this country from Bulgaria, arriving at JFK airport,” he wrote on Twitter. “My co-founder Baiju’s parents were also immigrants, arriving in America from India shortly before he was born.”
“Our families came from humble beginnings — they came to America with barely any money hoping to give their children the opportunity for a better life. It’s a testament to the mobility afforded by the American financial system that we stand here today.”
“Six years ago, we launched Robinhood with a mission to democratize finance for all. We built a mobile-first product that didn’t charge commissions or require account minimums. We didn’t build Robinhood for the rich or those with decades of experience. We built it for everyone.”
“We’re humbled to be serving over 22 million people, and yet, there is so much more to do. 68% of 18-29-year-olds in America don’t have any money invested at all, and many people around the world don’t even have access to a functional financial system.”
He added: “We are deeply grateful to the investors who took a chance on Robinhood’s vision. Grateful to our Robinhoodies who work tirelessly to serve our customers every single day. And grateful to our families, without whom we wouldn’t be here today.”