Is Robinhood having its own GameStop moment?

Shawn Knight

Posts: 13,500   +132
Staff member
Why it matters: Robinhood Markets went public on the Nasdaq on July 29 but failed to make much of a splash. After opening at $38 per share, the stock closed down around eight percent and didn’t make much headway in subsequent days. That all changed this week, however, as the stock embarked on a wild rally that’s reminiscent of what we saw earlier this year with GameStop, BlackBerry and AMC.

The rally started on Tuesday when shares gained nearly 25 percent. Excitement spilled over into today with shares hitting a high of more than $80 but things have since cooled a bit as trading was halted multiple times due to volatility.

CNBC said it was unsure exactly what was driving the activity, but suggested it might have something to do with recent attention from investor Cathie Wood.

The Ark Invest CEO reportedly purchased 89,622 Robinhood shares on Tuesday through the firm’s ARKF Exchange Traded Fund (ETF), which was worth around $4.2 million at yesterday’s closing price of $46.80. At its current value (around $62 as of writing), the position is now worth roughly $5.6 million.

Robinhood also appears to be quite popular among retail traders as evident by comment volume via Swaggy Stocks.

Permalink to story.

 

Toju Mikie

Posts: 217   +197
I bought 2 shares during the IPO event they had. Robinhood was my first brokerage when I joined in 2019 and I think it was the only brokerage that didn't have an account minimum, so I was excited to finally be called an investor. In a society where benefits and hours worked are dwindling and jobs are no longer offering 401k accounts, the small investors now have a way to invest, grow their investment accounts, and change the stock market as a whole.

Fractional shares are my favorite thing about Robinhood and allowed me to invest in companies that I literally had no chance to invest in before.
 

QuantumPhysics

Posts: 5,282   +6,006
Robinhood has terrible fundamentals just like the rest of the MEME stocks. It's not profitable and probably won't ever be. The IPO is there to pay off the people who put their money into it early on. The actual IPO performed terribly: losing 8% on Day 1 and up to 12% on Day 2. It's being pumped now, but soon Bogdanoff is going to dump eet.
 

mbrowne5061

Posts: 1,915   +1,115
I bought 2 shares during the IPO event they had. Robinhood was my first brokerage when I joined in 2019 and I think it was the only brokerage that didn't have an account minimum, so I was excited to finally be called an investor. In a society where benefits and hours worked are dwindling and jobs are no longer offering 401k accounts, the small investors now have a way to invest, grow their investment accounts, and change the stock market as a whole.

Fractional shares are my favorite thing about Robinhood and allowed me to invest in companies that I literally had no chance to invest in before.

you do realize that fractional shares and commission-free trading pre-dates Robinhood, right? The only thing they gave the masses was options contracts without requiring a massive amount of capital up-front. And if you're a small investor, you'd be wise to stay away from options until you fully understand them and actually have the capital to back them. More people lose their shirts on options than make it big.
 

ckm88

Posts: 385   +267
Feel sorry for those that invested in this piece of garbage - after all they did to screw over retail investors. Lots of bag holders next week.
 

Toju Mikie

Posts: 217   +197
you do realize that fractional shares and commission-free trading pre-dates Robinhood, right? The only thing they gave the masses was options contracts without requiring a massive amount of capital up-front. And if you're a small investor, you'd be wise to stay away from options until you fully understand them and actually have the capital to back them. More people lose their shirts on options than make it big.

I just buy and hold. Options and futures just seem too risky for me. I always wondered why options have to be done with 100 shares though. If there was an options contract with 5 shares, I would probably try it out.

I think you are right about the fractional shares upon remembering why I signed up. Robinhood didn't have fractional shares when I signed up but you could start with only $1. I signed up for E-Trade back in 2018, back when they had $500 account minimum and my account was closed because I didn't have $500. Robinhood was what I found after E-Trade.
 

mbrowne5061

Posts: 1,915   +1,115
I just buy and hold. Options and futures just seem too risky for me. I always wondered why options have to be done with 100 shares though. If there was an options contract with 5 shares, I would probably try it out.

I think you are right about the fractional shares upon remembering why I signed up. Robinhood didn't have fractional shares when I signed up but you could start with only $1. I signed up for E-Trade back in 2018, back when they had $500 account minimum and my account was closed because I didn't have $500. Robinhood was what I found after E-Trade.
The 100 shares bit is a hold over from "older days". It used to be you bought shares in blocks of 100, or even 1,000, straight from the exchanges and that was the only way you could buy them. That is where brokerages came in, and would buy those blocks for their customers, and split and combine them up as needed. Then, when online trading hit investors, and as exchanges/brokerages got networked together, it became feasible to trade individual shares directly, thanks to the increased volume. Meanwhile, options contracts (another hold over from the original stock exchanges) never really saw these updates as they really are too risky to split up into smaller batches (no one wants to be the one to split up an option contract, and then try to be the one to put it back together when the time comes to sell).

At least this is best I have been able to piece things together. I may be off the mark.