Last week Robinhood made one of the most hotly anticipated public debuts of 2021. Yet the company’s IPO was anything but a good one. By the end of its first day of trading, Robindood stock (HOOD) finished 8.37% below its IPO price. This fall made it one of the rare tech IPOs to close down on its opening day.
While Robinhood executives, investors, and employees may have been hanging their heads that day, some traders loved that HOOD shares had a dreadful IPO. I’m talking about the meme stock traders that frequent communities like WallStreetBets on Reddit. Some of these retail investors (as opposed to major institutional investors) are still holding grudges against Robinhood for the restrictions the company placed on buying GameStop shares earlier in the year. Other meme stock traders are angry at Robinhood for only making about 20% of its shares available to retail investors, meaning large institutions had a better opportunity of getting in on day one of trading.
And by all accounts, it looked like the meme stock traders won the battle. With many withholding buying the stock—and some actively shorting the stock—HOOD shares sank over 8% on IPO day. Yet it’s Robinhood who may be having the last laugh now.
Yesterday HOOD shares surged a whopping 24.2% to $46.80 per share—well above last week’s $38 IPO price. And today HOOD shares are already surging in pre-market trading—they’re up another 16% to $54.34 as of the time of this writing.
So what does this mean for the future of Robinhood shares? No one has a crystal ball, but what can be said for sure is meme traders staying away from the stock or shorting it last week made the wrong bet. Six days after its disappointing IPO, Robinhood is clearly out on top again.