After a Disappointing IPO, is Robinhood Suddenly Worth Twice as Much as it was Last Week?
- Trading Systems
- 05.08.2021 05:15 pm
Trading derivatives in Robinhood stock (HOOD) was one of the top ten most traded markets on the European trading and investing platform, Capital.com yesterday (4/8/2021). This follows reports that Robinhood had allegedly halted trading of their own stock on their own platform as volumes surged.
David Jones, Chief Market Strategist at European investment trading platform Capital.com, evaluates why there is a sudden peak in interest for HOOD.
He says: “After a disappointing market debut last week, the online broker Robinhood Markets ended Wednesday trading 50% higher than the day before. Short-term market moves can make little sense at the best of times - and this is just as true for newly listed stocks. Of course, Robinhood has been front and centre this year as the broker of choice of retail investors involved in so-called meme stocks such as GameStop and AMC. The stock price was so volatile on Wednesday that Robinhood allegedly had to stop trading of its own stock, on its own platform.
"The company was a hot topic of discussion on Reddit's Wall St Bets forum this week and some are suggesting that this sharp rise is once again down to FOMO - the fear of missing out. This can potentially create real momentum in a market that could last for some time - the meme stocks earlier this year are a good example, as was the strong run for the cryptocurrency sector in May.
"Alternatively it could be a short-lived spike. But after the disappointing IPO, is Robinhood suddenly worth twice as much as it was last week? This could be an interesting one to watch but it wouldn't be surprising if those whose "fear of missing out" led them to buy, end up nursing a different sort of regret in the days ahead."