Robinhood Markets’ shares increased by 20% on Tuesday, rising more than $7 billion, above the price set at last week’s poorly received IPO.
The shares traded at $46.80 in late afternoon trading, marking its third day of earnings, well above the $38 price set at the IPO last Wednesday.
Robinhood shares, worth about $3.6 billion, were traded in the late afternoon, among the top 10 most traded stocks on Wall Street.
Last Thursday, Robinhood fell 8% on its first day of trading, baffling some analysts who had not expected the lukewarm support of the small traders it serves and for whom it had taken the strange step of as much as 35% of the shares in the flotation.
Company executives sold shares a day before the launch, with Chief Executive Vlad Tenev buying 1.25 million shares for about $45.5 million, according to documents filed at the time of the IPO. These sales were announced in advance, and any impact had virtually disappeared by Tuesday.
Robinhood’s smartphone-trading app played a major role in fuelling this year’s “meme” stock rush, but retail investors mostly gave the stock the cold shoulder on online forums like Reddit last week.
Robinhood’s trading app bans users from selling shares within the first 30 days of IPOs and restricts them from participating in future IPO deals for two months in the event of a breach.
For more information, read the original story in Reuters.