Shares of Robinhood surged Tuesday as individual investors pushed the price of the stock trading app above its IPO price of $38 per share last week.
The Menlo Park, California-based company went public last Thursday on the Nasdaq under the symbol HOOD.
It opened at $38 per share—the low end of its offering range—but fell 8% on its first day of trading and continued trading below that price until Tuesday. It was certainly not the debut some expected Robinhood to have.
Robinhood’s stock, however, closed at $46.80 per share, up 24.2% on Tuesday.
The trading app has garnered attention from retail investors after—in an unusual move— giving 25% of its IPO shares to its clients on Fidelity.
Robinhood, on Tuesday, recorded 8,988 buy orders and 7,931 sell orders on Fidelity. The ticker is also a top-mentioned stock on Reddit’s WallStreetBets, according to Swaggy Stocks. All these explain why long-term investors who see Robinhood’s future value are moving the stock up.
Why bulls love Robinhood
The company has gained admiration from a vast swath of bulls for its massive growth, especially during the COVID-19 pandemic and GameStop trading saga. As of March 2021, Robinhood had 18 million clients, up from 7.2 million last year with funded accounts reaching 22.5 million in the second quarter.
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Should Robinhood — which offers equity, cryptocurrency, and options trading, as well as cash management accounts —expand more into the payments space, this could boost its stock even higher.
What’s more, CNBC’s Jim Cramer believes shares of Robinhood can be purchased at their current levels. As it turns out, the brokerage, according to Cramer, has a bright future catering to the financial preferences of younger people.
Prior to Robinhood’s IPO, Atlantic Equities gave the company an overweight rating and a $65 per share 12-month price target.
With the HOOD’s stock at $46.80 per share and rising, Robinhood could well be on its way to hitting that target. Even better, Ark Invest’s Cathie Wood, since Robinhood’s debut on the Nasdaq, has purchased about 3.15 million shares of the company. Based on Robinhood’s current price, Wood’s total position is worth roughly $147.5 million.
