Robinhood share price: why has it spiked up 85% since IPO?

Investors this week snapped up shares of Robinhood, helping the ‘meme stock’ reverse its rocky first-day showing.

  • Robinhood Markets Inc (Nasdaq: HOOD) share price closed at US$70.39 per share on Wednesday (04 August 2021)
  • The ‘meme stock’ has shot past its IPO price by 85% despite the tepid debut
  • Options trading has begun, and big-name investors also boosted confidence
  • Interested in trading Robinhood shares? Open an account with us to get started.

Robinhood stock price: what drove the surge?

California-based Robinhood’s stock price soared by 50.4% on Wednesday to finish at US$70.39 on a heavy volume of 174.4 million shares changing hands, less than a week after the online brokerage went public in a disappointing debut.

The so-called ‘meme stock’ surged as much as 82% to touch a session high of US$85 on Wednesday, giving it a market value of US$71 billion. The volatility prompted multiple trading halts on the Nasdaq exchange, The Financial Times (FT) reported.

After four straight days of gains, Robinhood’s market capitalisation has ballooned to US$58.9 billion, surpassing hundreds of blue-chip US firms such as Twitter Inc, carmaker Ford, and asset manager T Rowe Price.

This week’s reversal of the California-based company’s underwhelming debut came as retail investors on social media embraced the stock.

It was also triggered by the new availability of options contracts tied to Robinhood’s shares, FT said, citing traders and analysts.

What’s your view on Robinhood? Take a long or short position today.

Go long or short with CFDs on 16,000+ shares with our award-winning platform.* Perfect your technique with S$200,000 worth of virtual funds in your free demo account. Create your free demo here.

* Based on the Investment Trends 2018 Singapore CFD & FX Report based on a survey of over 4,500 traders and investors. Awarded the Best Online Trading Platform by Influential Brands in 2020. Awarded the best retail FX provider for Asia by FX Markets in 2020.

Retail investors flock in, options trading starts

The stock began trading last Thursday (29 July), but ended up tumbling 8.4% from its offer price of US$38 per share.

That was among the worst debuts in US initial public offering (IPO) history, for a flotation of its size. Dealogic data showed that Robinhood chalked up one of the biggest first-day percentage declines by US-listed IPOs raising at least US$2 billion.

But retail trading volume surged tenfold on Tuesday, propelling the stock price’s 24% increase, according to Vanda Research.

Also brightening sentiment on Robinhood were big-name investors such as asset management firm ARK Invest’s founder Catherine Wood. On Tuesday, her Ark Fintech ETF bought another 89,622 shares of Robinhood, with the stock now making up 0.9% of its portfolio, Reuters reported.

As Wood is known as a star stock picker, her latest sizable position was seen as a ‘vote of confidence’ in Robinhood, said private-equity firm Great Hill Capital.

In addition, Wednesday was the first day that investors could trade options on Robinhood shares. More than 293,000 contracts changed hands by the afternoon, roughly evenly spread between bearish puts and bullish calls, Reuters reported.

Contracts that were betting on Robinhood exceeding US$70 per share by 20 August 2021 were the most actively traded, Reuters added. The next most traded contracts were puts that would come into play if the stock falls below US$20 per share by mid-August.

FT noted that dealers selling bullish call options to investors would typically buy Robinhood stock to hedge their risk, pushing the market in an upward direction.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.