[ad_1]
Text size
The time of dreams
The boom in the retail investor movement over the past year led by users on Reddit forums such as WallStreetBets has been inextricably linked to
Robinhood Markets
and the proliferation of commission-free trading. But some members of the Reddit crowd wanted nothing to do with the company’s high-profile initial public offering on Thursday.
WallStreetBets has attracted 10.7 million subscribers, most of whom have joined this year. The group of retail investors has grown so important that data providers like Thinknum sell statistics on stocks mentioned on Reddit to institutions looking to keep tabs on their movements.
After Robinhood stock (ticker: HOOD) initially fell 12% below its IPO price of $ 38, a popular forum post mocked CEO Vlad Tenev and one commentator joked saying Robinhood would limit trading in its own stocks – a reference in late January when online brokers including Robinhood limited trading in some volatile stocks like
GameStop
(GME) and
AMC Entertainment
(AMC), citing warranty requirements in the midst of rampant trade.
This event, along with other high-profile tech crashes during volatile trading days, led to calls from Reddit users urging others to quit the app. That said, the company’s regulatory documents show that the increase in business activity has spurred immense growth in user numbers, as well as revenue from the controversial Order Flow payment process. Robinhood receives payments from market makers who execute stock and option orders for clients of the brokers. Some lawmakers have questioned the practice, saying it obscures the true costs of doing business from customers. Brokers say the process gives retail investors a better deal and allows for commission-free transactions.
When reports in March revealed that Robinhood intended to go public, some Reddit users joked that they wanted to short-sell Robinhood shares using the company’s own app. Others urged peers to ignore the offer altogether, believing retail investors could be at a disadvantage. Although Robinhood has said it will set aside up to 35% of its stock for Robinhood clients to buy during the IPO, the stock’s 8.4% drop to $ 34.82 on Thursday means that users who got the IPO price of $ 38 would be in the red.
“Future penny stock,” a WallStreetBets commentator wrote Thursday.
Another WallStreetBets user said in an article that he enjoyed watching the stock drop. “I’m logging back into my Robinhood account so I can watch the stock in real time,” another user wrote.
On Superstonk, a GameStop-focused Reddit community from WallStreetBets, a post that has since been deleted by moderators from a Fox Business commentator discussing the disappointing IPO with the caption “Get REKT $ HOOD” collected thousands of positive votes. (Rekt is Internet slang for castaways; upvotes are equivalent to likes.) Many Reddit users are still actively involved in such communities supporting the actions of GameStop or AMC, and consider discussions on d other actions as a distraction.
Not all Reddit traders were united. On WallStreetBets, some have argued that a top post calling Robinhood “by far the worst business that ever existed” was overkill.
“I have mixed feelings about them,” wrote one user. Although they thought the business had been shady at times, “If it weren’t for them to revolutionize the industry, commission-free trading would be a pipe dream and we would still pay $ 9.99 just to execute a trade.” Having said that, I am not going to invest and I will not use them.
Write to Connor Smith at [email protected]
[ad_2]
Source link