Whiplash: Robinhood Files Registration Statement to Sell 98 Million Shares, Price Drops

It has been a volatile week in trading for shares in Robinhood (NASDAQ”HOOD). Following a tepid initial public offering, last week that saw shares drop below its IPO price of $38, shares in Robinhood rocketed higher – at one point trading above $80 a share.

Today, Robinhood filed an S-1 Registration statement indicating its intent to sell 97.8 million shares and markets reacted. Today, Robinhood shares dropped over 27% closing at just under $51 a share after starting the day over $60.

The additional sale of shares a week after its IPO is for selling stockholders – so no money will accrue to the firm. The selling shareholders are largely VC firms that were early investors in Robinhood. The names are available in the S-1 filing.

Meanwhile, there has been a lot of speculation as to why Robinhood has experienced so much volatility in the few days after its public float. While it is either retail or institutional money – most likely it is big money/algo traders that see an opportunity to drive near-term gains.

Robinhood’s valuation has jumped with its market cap now standing around $42.6 billion. So is it worth the money? Many pundits think not – unless Robinhood can execute on becoming the one super app to rule them all (globally).



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