Vlad Tenev, CEO and co-founder Robinhood Markets, Inc., is displayed on a screen during his company’s IPO at the Nasdaq Market site in Times Square

Robinhood's shares plunge in grim stock market debut

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2021-07-29 21:00:06

Vlad Tenev, CEO and co-founder Robinhood Markets, Inc., is displayed on a screen during his company’s IPO at the Nasdaq Market site in Times Square in New York City, U.S., July 29, 2021. REUTERS/Brendan McDermid

July 29 (Reuters) - Robinhood Markets Inc's shares (HOOD.O) fell more than 10% on their first day of trading, as many investors who used the popular trading app to participate in this year's "meme" stock trading frenzy snubbed its initial public offering (IPO).

The company's easy-to-use interface has made it a hit among young investors trading from home on cryptocurrencies and stocks such as GameStop Corp (GME.N) during the COVID-19 pandemic .

Some IPO investors stayed on the sidelines, citing concerns over its frothy valuation, the risk of regulators cracking down on Robinhood's business, and even lingering anger with the company's imposition of trading curbs when the meme stock trading frenzy flared up at the end of January. read more

Many IPOs benefit from excluding retail investors, who end up fueling a first-day trading pop by snapping up shares in the open market. By letting many retail investors under the IPO tent, Robinhood made it less likely that investors would see big gains on the first day.