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It is possible that Robinhood investors may laugh after the optimal IPO




It’s too early to make that call. But most of all, the actions of Robin Hood debuted at $ 38, the same price as Facebook (FB) on its IPO in May 2012. Today Facebook is trading at about $ 361.

Robinhood has certainly had a roller coaster ride so far: shares fell 8% on the first day and dropped to $ 33.25 on the second day. But since then, it has rallied to more than 40% above the IPO price and is now trading at around $ 54, even reaching a high of $ 85 last week.

“The platform that drove the meme stock movement has become memory, sometimes to Robinood’s benefit and sometimes to its detriment,” said Jonathan Anastas, president of Alpha Sports Tech, a gaming company for to mobiles.

So much for Reddit’s “monkey” army that puts Robinhood on its knees? May be. The company has been blamed, and also criticized, for helping to turn the investment into something like a game. But Anastas argues that Robinhood simply follows the money.

“They appeal to a demographic trader who focuses more on excitement and drive,” Anastas said. “Robinhood is not valued on the basics.”

Already looking for acquisitions

Still, Robinhood is now a publicly traded company with a market valuation of $ 45 billion in the north and wants to grow its business quickly, just as Facebook did before.

The platform announced Tuesday which buys Say Technologies, an online shareholder communications platform aimed at individual investors, for $ 140 million in cash.
“Like Robinhood, Say was based on the belief that everyone should have the same access to financial markets as Wall Street inmates,” wrote Aparna Chennapragrada, Robinhood’s product director. blog post.

“We share a common goal of removing barriers that prevent people from participating in our financial system,” he added.

The fact that Robinhood wants to make an acquisition so soon after its IPO is also similar to a big business that Facebook withdrew in 2012, just before it went public: Facebook bought Instagram for $ 1 billion, a agreement that some considered too expensive. at the time.

Facebook, like Robinhood, also fought for the door. In fact, it was a couple larger stock market flop as the shares fell about 50% below their IPO during the first few months of trading before falling.

But CEO Mark Zuckerberg ended up just laughing. The acquisition of Instagram helped Facebook become a larger mobile player and allowed it to further attract coveted young user advertisers. Nine years after its “failed” IPO, Facebook is now worth more than a trillion dollars.

Lots of competition in fintech technology and from Wall Street

However, it is hardly taken for granted that Robinhood is on track to achieve a similar increase in 2030. Robinhood CEO Vlad Tenev, like Zuckerberg, will have to keep abreast of market trends to become even bigger.

“Robinhood has had a lot of doubts, but they have amassed millions of account holders and the marching orders are clear,” said Michael Kamerman, CEO of Skilling, an online brokerage firm. “I think Vlad wants to attract customers with an even higher net worth.”

Robinhood will also have to fend off great competition over the next decade.

Rival online shopping companies are busting Robinhood, including Webull and eToro, which is in the process merging with a special purpose acquisition company (SPAC) so that it can also be made public.
Meanwhile, financial giants Charles Schwab (SCHW) i Morgan Stanley (MS) they are also doing a courtesy with retailers thanks to their respective acquisitions of online brokers TD Ameritrade i E-commerce.

With that in mind, Robinhood could also end up one day becoming a juicy acquisition target for a larger financial company that would probably love to have access to Robinhood’s younger customer base.

“Wealth has gone from boomers and generation X to millennials and generation Z,” Anasta said. “Younger investors have different preferences.”