In Robinhood’s Debut, Echoes Of Facebook

Robinhood’s Nasdaq debut was regarding and lackluster. And to Maryland Smith’s David Kass, it was additionally acquainted.

The buzzy Menlo Park, California-based firm went public on July 29, below the ticker HOOD and priced at $38 a share, unimpressively towards the underside of its providing vary. It slid from there, ending its debut day about 8% decrease at $33.82, and stayed submerged till Aug. 3, when it popped increased, and closed at $46.80. However, as of late Aug. 4, HOOD was buying and selling at about $70 a share, representing an approximate 85% improve over its IPO worth.

“There's a comparability to be made to Fb’s IPO in 2012, which was initially disappointing,” says Kass, medical professor of finance on the College of Maryland’s Robert H. Smith Faculty of Enterprise.

The 2 firms share an inauspicious commonality, Kass says, in that each massive IPOs closed flat or under the debut worth on that first day of buying and selling. “Normally there's a bump up in worth the primary day, after which possibly steadily over time it could come down and certainly commerce under the IPO worth,” he says. “However that normally doesn’t occur on the primary day.”

Fb’s IPO was priced at $38 a share (coincidentally, the identical worth as Robinhood’s). When FB went public at 11:30 a.m. ET on Friday, Might 18, 2012, the primary commerce got here in at $42.05 per share – a achieve of practically 11%. However the shares sank from there,

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