(Bloomberg) -- Zero-fee trading platform Robinhood Markets Inc.’s $2 billion initial public offering was eagerly welcomed by retail traders even as shares tumbled.
Robinhood ranked as the top trade on Fidelity’s platform Thursday, with over 23,000 shares on buy orders as of 1:20 p.m. in New York. Runner-up Facebook Inc. clocked in with more than 12,000 buys, according to data compiled by the brokerage.
It’s been a rocky ride for those newly-minted Robinhood investors. The stock plunged more than 12% from its IPO price of $38 -- the lower end of its expected range -- before paring losses. The debut was unique, with Robinhood selling between 20% and 25% of its pre-IPO shares to its own retail investors, who fueled the platform’s massive growth amid the pandemic trading boom.
“It looks like some retail investors are having a Pavlovian buy-the-dip response,” said Max Gokhman, head of asset allocation at Pacific Life Fund Advisors. “Fidelity customers don’t have the same emotions toward Robinhood, such as feeling betrayed when they shut down trade in GameStop.”
While investors evidently dived in to buy Robinhood’s initial dip, its initial tumble marked the weakest open for a U.S. IPO of comparable size since Uber Technologies Inc.’s debut in 2019, according to data compiled by Bloomberg.
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