Robinhood share price surges as ‘meme stock’ traders close in
After a disappointing opening last week, it looks like Robinhood’s Merry Men have finally arrived.
But on opening day, it looked as if the fintech had fallen at the first hurdle: getting its own customers on board.
Share prices in Robinhood tanked by about ten per cent within the first few minutes of trading, eventually recovering slightly to close the first day down 8.37 per cent.
It now looks as if the trading platform has rallied. At the time of writing this article, Robinhood’s share price is up by nearly 63 per cent to $63.06 per share, on opening day it closed at $34.82.
On Wednesday morning, more than 39m Robinhood shares had been traded, more than half the firm’s 30-day average volume.
Robinhood’s price volatility is an undeniable marker of ‘meme stock’ traders, who flooded the stock market earlier this year in a Reddit vs. Wall Street battle that saw everyday traders make millions.
Retail traders piled into stocks like GameStop ($GME), BlackBerry ($BB), Finnish technology company Nokia ($NOK) and cinema giant AMC Entertainment ($AMC) after noticing that several Wall Street hedge funds had been shorting certain under-performing stocks.
Following the discovery by a member of the Reddit threat r/WallStreetBets, users following the investment thread were urged to buy as much GME stock as they could, eventually pushing Wall Street hedge fund Melvin Capital to close its position, initially worth $55m, haemorrhaging nearly $3bn in the process.
Now, followers of the r/WallStreetBets thread are discussing trading Robinhood stocks and debating over whether or not the stock is officially a ‘stonk’ (a slang term for ‘meme stocks’).
By the looks of it, and if anything 2021 has taught us, this is probably not the last flash of volatility that the Robinhood stock will see.