Robinhood Surges Higher For A Second Day As Reddit Mentions Climb

Robinhood Surges Higher For A Second Day As Reddit Mentions Climb

over 2 years ago1 min

Shares in trading app Robinhood rallied for a second day on Wednesday after decisively breaking through their $38 initial public offering (IPO) price on Tuesday. 

The stock climbed as high as $55 in New York pre-market trading, which is dominated by professional investors. After regular trading opened, the shares surged further – climbing as much as 65% to $77, more than double the price set in last Thursday's IPO.

There was no obvious news to drive the shares higher, but the company has been getting more attention from users on Reddit’s influential WallStreetBets forum this week, according to data from SwaggyStocks. Robinhood was mentioned nearly 1,000 times on WallStreetBets on Tuesday, according to SwaggyStocks – although the majority of posts had a negative sentiment.

Chart of Robinhood mentions on Reddit

Robinhood’s IPO received lukewarm enthusiasm from retail investors: it was only the 28th most traded stock on retail platforms as it hit the stock market on Thursday, according to data from VandaTrack. And while small investors bought $19 million worth of Robinhood shares on its first day as a public company that was far below the $100 million-plus poured into Snap and Uber on their debuts. 

However, sentiment among smaller investors appears to have suddenly shifted this week, with retail trading jumping 10-fold on Tuesday compared to the day before.

Chart of retail trading in Robinhood shares

Robinhood, whose app was so central to the “meme stock” phenomenon that took off this year, appears to be becoming the latest beneficiary of the craze.

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