Robinhood, which brought meme stock trades to the forefront of the market, has made its debut on Wall Street—and early investor excitement is a lot more muted than the company likely hoped for.
Shares began trading at 12:25 p.m ET on Thursday, showing none of the gains seen in the stocks its users have championed over the past year.
Shares traded right above the $38 asking price in the first few moments, but quickly moved lower than that point, falling 9%. The volatility will likely continue for some time Thursday..
Robinhood’s IPO is unlike many others. The company reserved one-quarter of its initial shares for its 22 million users—and is allowing them to sell 15% of their shares immediately after the stock starts trading. That’s an unusual test of consumer loyalty that institutional investors could keep an eye on.
Early trending on Thursday showed Robinhood trading as much as $4 above its IPO price, but that slipped as orders came in. Of course, a dip on the first day of trading isn’t fatal. Uber, Rackspace and Chegg were all down on their first day of trading and went on to do very well.
Robinhood faces some unique challenges, though. The company, while well known, is already under investigation by federal regulators due to an incident in January, when the brokerage restricted trading of shares in companies like GameStop and AMC Entertainment amid chaotic volatility. The brokerage registration status of its two founders is also being probed.
The company was valued at roughly $32 billion, the bottom of the range it was seeking. It’s first trade price was also at the lower end of the range, indicating investor interest was lower than expected.
The company raised $2.1 billion in the IPO.
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