82% in a few hours and already 3 interruptions in trade. Here is a frenzy worthy of GameStop. This is the honor that the stock marketers did on Wednesday as Robinhood, their favorite online broker, who entered the Nasdaq on July 29 with relative indifference. Its IPO price was set at $ 38 per share. It hit $ 85 early in the session on Wall Street, doubling Robinhood’s valuation to $ 65 billion.
The enthusiasm did not last and the title won “only” 32% at the end of the afternoon. But the volume of transactions for individuals had already increased tenfold from the previous day, according to Bloomberg. And no less than 62 million shares had changed hands in an hour.
All behind Cathie Wood
This runaway seems to have been triggered by the decision on Tuesday of Ark Investment management, the investment company of star manager Cathie Wood, to increase its stake in Robinhood.
The listed Ark Fintech Innovation ETF bought nearly 90,000 Robinhood shares on Tuesday, already pushing the stock up 24%. Ark thus confirms its interest in the online broker which had encouraged the outburst of crowds during the frenzy on “same stocks”, such as GameStop or AMC Entertainment at the beginning of the year.
22 million users
The ARK Innovation ETF had already invested in 1.3 million Robinhood securities on the very disappointing first day of the online broker’s listing. An 8% drop for one of the most anticipated IPOs of the year. The result was not up to the expectations of the group which has nearly 22 million users.
Individuals will therefore have ended up responding to the broker’s calls. He had pulled out all the stops, organizing a presentation of the company ahead of the IPO for their attention. It had also reserved up to 35% of the shares offered to its users, who were able to acquire securities at the same price as institutional investors. A favor that could also explain why the title took a long time to take off. A part of them having already been satiated upstream, they did not need to rush for the title from the first days.