Robinhood shares have been extraordinarily volatile in recent days, jumping by as much as 81 percent on the day after a disappointing IPO launch last week.
Stock and cryptocurrency trading app Robinhood’s stock and cryptocurrency trading app has undergone tremendous volatility in recent days after generating unpleasant headlines with its poor IPO launch on Nasdaq last week.
The app that has so frequently been the benefactor of frenetic meme stock trading grew to resemble the latest internet craze in an ironic twist that saw the price of HOOD stocks surge by as much as 82 percent in one day.
HOOD has gained 102 percent from its Nasdaq debut on July 29 and is currently trading at $70.39, down slightly from its peak of $85. on August 4. Nasdaq delivered the corporation a dose of its own medicine by suspending trading many times in response to such extreme volatility and an exponential increase in retail trading volume.
Oh, the irony of Robinhood’s stock being halted by the stock exchange due to volatility
— Pomp (@APompliano) August 4, 2021
Robinhood’s notoriety among retail and cryptocurrency investors stems from its decision to suspend trading in Gamestop (GME) and other stocks in the midst of unprecedented retail-driven price volatility earlier this year, as Antony Pompliano jokingly points out.
The company received additional criticism for temporarily disabling instant deposits for cryptocurrency purchases during a period in which Dogecoin (DOGE) soared by 900 percent. As a result of the app’s unpopularity, online traders reacted with a certain amount of delight when it made its public debut after a shaky start.
Analysts believe that Cathie Wood of ARK Invest’s decision to increase her position in Robinhood during the middle of the week – adding 89,622 shares of HOOD in ARK Fintech Innovation ETF to the 3.15 million shares Wood had already purchased – may have been the catalyst for the subsequent price recovery.
Because of the widespread interest among retail traders on the internet, HOOD’s rapid, meme-stock-like price increases have continued to be fuelled in recent months.
According to Swaggy Stocks, which tracks the top trending stocks mentioned on the popular sub-reddit, WallStreetBets, HOOD was by far the most mentioned stock on the forum over the past 24 hours, garnering 2770 mentions compared to 265 mentions for Tesla (TSLA), 1960 mentions for the SPDR S&P 500 trust (SPY), and 488 mentions for Moderna (MTLA).
HOOD is a publicly traded company that manufactures (MRNA). According to Breakout Point, a retail investor sentiment tracker, the ticker HOOD has been the most popular over the last few days based on its aggregate retail popularity framework, which “aggregates across dozens of retail chatter/sentiment sources.”
According to Ivan Cosovic, the founder of Breakout Point, the stock’s transformation from “a very hated IPO in the retail world” to a meme-like stock can be attributed to three factors: the influence of Wood’s bullish position, the decision of some retail “investors on the sidelines [who] decided to give it a try,” and the subsequent, well-known online fear of missing out.
Following a series of major system outages on Robinhood this spring that prevented users from accessing their accounts, traders have banded together to support a number of class-action lawsuits against the company in the United States. As previously reported,
In response to allegations by the Financial Industry Regulatory Authority (FINRA) that the company’s trading platform had caused “widespread and significant harm” to thousands of users and had “systemic supervisory failures” since as early as September 2016, the company has paid $57 million in fines and provided approximately $12.6 million in restitution to certain customers.
Federal and state-level securities regulators in the United States, as well as members of Congress, have expressed concern about the platform’s handling of the Gamestop incident.