Vlad Tenev and Baiju Bhatt will attend Robinhood Markets IPO Listing Day on July 29, 2021 in New York City.
Cindy Ord | Getty Images
Robinhood stocks rose again on Friday as the volatile stock ended its first full week of trading around 60% up.
Robinhood stock rose 10% to $ 56.39 on Friday after taking a lash this week. The newly public trading app had a meme stock moment followed by a surprise announcement of the stock sale.
On Friday, Robinhood reiterated it will not sell any shares after it was announced Thursday that existing shareholders will sell up to 97.9 million shares over time. That news drove the stock down 27% on Thursday.
“Robinhood is not selling any additional securities of its own, but has resold S-1 on behalf of some of its shareholders under a pre-existing contractual obligation,” said Robinhood.
The stock trading app also made it clear on Friday morning that these sales would not start immediately, which allayed concerns about an immediate surge in stock supply that could weigh on the stock. Robinhood said these sales cannot commence until after the SEC clears the transaction, which should not occur until after Robinhood’s second quarter results on Aug. 18.
The stock rose on Friday in pre-trading after the Robinhood clarification.
The rise and fall of Robinhood marked a stark contrast to the lackluster debut of the free commission brokerage firm on Nasdaq last week.
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Robinhood stock’s surge began Tuesday when it rose more than 24% and exceeded its IPO price of $ 38 per share, amid large-scale purchases by pushy investor Cathie Wood. ARK Invest owns 3.2 million shares north of HOOD.
Wednesday saw the free trade pioneer’s shares surge by 50%, akin to the meme stock rallies the company helped perpetuate in names like AMC and GameStop earlier this year. The start of options trading was also attributed to the share.
On Thursday, the stock fell after news of the stock sale. Shareholders were among those who helped prop up Robinhood’s balance sheet during the historic trade frenzy earlier this year.
With unprecedented volatility and increased deposit requirements, the broker was forced to develop lines of credit and borrow new debt to ensure they had enough cash to clear trades. Selling shareholders include a number of venture capital firms who made early investments in Robinhood.
Investors’ down-protected bonds were converted at a 30% discount to the IPO price, so they bought the shares at $ 26.60 per share, according to Rainmaker Securities. Investors can sell these stocks after approval from the SEC.
“Emergency financing usually offers short-term exits and a lot of protection for investors. That’s what you get when you need $ 3 billion in 48 hours, ”said Greg Martin of Rainmaker Securities.