Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Robinhood shares surge 50%, as investors scoop up 'the meme of memes'

Stock MarketsAug 04, 2021 09:26PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The logo of Robinhood Markets, Inc. is seen at a pop-up event on Wall Street after the company's IPO in New York City, U.S., July 29, 2021. REUTERS/Andrew Kelly

By Sruthi Shankar, Sinéad Carew and Medha Singh

(Reuters) -Shares of Robinhood Markets Inc (NASDAQ:HOOD) rose more than 50% on Wednesday during a wild trading session as investors scooped up shares after its underwhelming stock market debut last week. The online brokerage’s shares closed at $70.39, off the session high of $85 when the stock was up nearly 82%, with one analyst dubbing it "the meme of memes" in a reference to stocks popularized this year by retail investors congregating in online platforms such as Reddit's WallStreetBets.

The stock has risen far above its initial public offering price of $38 per share and has logged its fourth straight day of gains.

Its market capitalization rose to $58.8 billion, catapulting it ahead of Twitter Inc (NYSE:TWTR), restaurant chain Chipotle Mexican Grill (NYSE:CMG) and asset manager T. Rowe Price.Interest in the stock among retail investors soared on social media despite its weak market debut last week, when it fell below its IPO price. It was unclear exactly how much of Wednesday's buying was from retail investors, though. On Tuesday, retail trading volume rose tenfold, helping the stock gain 24%, according to Vanda (NASDAQ:VNDA) Research. Over the past 24 hours, Robinhood was by far the most mentioned stock on WallStreetBets according to sentiment tracker SwaggyStocks.

"We know from meme stock trading that's happened over the last several months that when there's a lot of activity on social media, sometimes that will drive a stock higher or lower,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab (NYSE:SCHW) in Austin, Texas. Wednesday marked the first day that investors could trade options on Robinhood shares, another way of betting on the stock. In recent months, options trades by retail investors have contributed to outsize moves in shares of companies like GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC) Holdings.

Some 293,000 contracts changed hands by 3:15 p.m. (1915 GMT), about evenly spread between bearish puts and bullish calls, putting it on pace for one of the most active options markets debuts ever, according to Trade Alert data.

"I am surprised by how active it is, ... but then this is the meme of memes," said Henry Schwartz, head of product intelligence at Cboe.

Contracts betting on the shares rising above $70 by Aug. 20 were the most actively traded. Puts that come into play if the stocks falls below $20 by mid-August were the next most actively traded contract.

Implied volatility on the stock’s August options stood at around 240% -- indicating that traders expect the stock to move about 15% every day, with a greater-than-30% daily move once every 20 days, according to a note from Christopher Murphy of Susquehanna Investment Group.

Sentiment on Robinhood has also been helped by star stock picker Cathie Wood, who heads the ARK Invest asset management firm. Wood's Ark Fintech Innovation ETF bought another 89,622 shares of Robinhood on Tuesday, and the stock now amounts to about 0.9% of its portfolio, according to a summary of the fund's daily trading. Wood's flagship ARK Innovation ETF has accumulated nearly 5 million Robinhood shares. "People are trying to jump on the back of Cathie Wood's vote of confidence in Robinhood shares," said Thomas Hayes, managing member at Great Hill Capital in New York. "The catalyst was certainly Cathie Wood putting in a sizable position after everyone was downbeat after the IPO."

Robinhood shares surge 50%, as investors scoop up 'the meme of memes'
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (13)
Karl Mauerbach
Karl Mauerbach Aug 05, 2021 3:02AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
How in the world is it even possible that so much bs is spread? Aren't journalists supposed to write about the truth? Just go on Reddit (wallstreetbets, superstonk, amcstock), and read what the communities there think about robinhood! After how rh deceived them so much back in January, they hate that stock. I don't know who is buying that stock, but it is definitely not the crowd on Reddit.
Kaveh Sun
Kaveh Sun Aug 04, 2021 11:19PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I bought 3 shares for fun. Honestly HOOD saves me thousand of dollars. Before robinhood, I used to pay 15usd or more per trade. Now i can flip less than a share which was impossible,unthinkable a few years ago.
William Bailey
William Bailey Aug 04, 2021 10:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
No more free credit from fed debt ceiling hit and tresuries runnin low
ron king
ron king Aug 04, 2021 10:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
investors my ******** The hedge funds are buying it to make apes think rh is the new thing. Stop spreading fud with your hedge fund supported and pre written articles of fear.
Calvin Sky
Calvin Sky Aug 04, 2021 10:08PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
lol noone is stupid enough to be dealt with rh again but what do i know !
Wicked Pete
Wicked Pete Aug 04, 2021 6:06PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The HYPOCRISY of this company is astounding.
jonathon blackmon
jonathon blackmon Aug 04, 2021 6:06PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
grow up and act like and investor
Waldemar Gau
Waldemar Gau Aug 04, 2021 2:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
this news is fake If you cant proof who are the buyers with how much volume
jonathon blackmon
jonathon blackmon Aug 04, 2021 2:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
175 million volume learn to invest
Danny Danny
Danny Danny Aug 04, 2021 2:35PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
It will pop. Not sure when but it will and it will be a bloodbath. Most of stocks are overvalued.
Clyde McClellan
Clyde McClellan Aug 04, 2021 2:35PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I agree alot of stock over valuedbecause to many looking for quick money n pump n dumps is hurting many but only here of ones making money by messages not stock fundamentals
jonathon blackmon
jonathon blackmon Aug 04, 2021 2:35PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
grow up folks $Hood fundamentals are solid
carol foulds
carol foulds Aug 04, 2021 2:08PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
🤣Retail my **** Vlad dumped millions of dollars worth of stock on IPO day. Pump and dump. They’re probably parking sell orders in the dark pool.
jonathon blackmon
jonathon blackmon Aug 04, 2021 2:08PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
that was in the finding
Joe DiMagico
Joe DiMagico Aug 04, 2021 12:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The only thing this is a proof of is the fact that US stock market is a complete joke of an criminal manipulated circus and scam.
Roberto Bustamante
Roberto Bustamante Aug 04, 2021 12:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
your entire article is *** Vlad  dumped HOOD in the first day and restricted the retail.
simon williams
simon williams Aug 04, 2021 12:04PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
another giant ponzi - now a meme stock
Ori The Ape
Ori_The_Ape Aug 04, 2021 8:54AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I'd love to know where you've heard this "buzz" It was the most mentioned for a crime they are still under investigation. Also why did vlad and insiders flipped the stock during the IPO?
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email