Dow Today – Robinhood Shares Jump, Like the Meme Stocks It Enabled
Robinhood, meme thyself.
The stock trading app that helped fuel a frenzy by small investors earlier this year soared on Wednesday in trading that had all the hallmarks of the “meme-stock mania” that drove up prices of companies like AMC Entertainment and GameStop.
Robinhood’s shares rose as much as 65 percent to $77, double their price at the end of last week, and trading was briefly paused by the Nasdaq stock exchange. They ended the day up 50.4 percent. It was a second day of sharp gains after jumping 24 percent on Tuesday.
Robinhood became a publicly traded company only last week. It priced its initial public offering at $38 a share, but the stock stumbled in its first day of trading on Thursday, finishing down more than 8 percent.
Since then, however, buyers have emerged, especially among the ranks of individual investors that the company caters to. On Wednesday, the stock shot to the top of Fidelity’s list of orders from the traders at its brokerage unit, suggesting that demand from day traders is driving the surge in the shares.
Ark Invest, the money management firm run by the social media-savvy stock picker Cathie Wood, has also been buying shares of Robinhood for the exchange-traded funds that serve as her investment vehicles. Daily disclosures of her holdings — which are closely followed and sometimes mimicked by day traders — have shown her buying more than 1.5 million shares of Robinhood, giving her a stake worth over $100 million at the peak of Wednesday morning’s surge.
Here’s what else is happening in markets today:
The S&P 500 fell 0.5 percent on Wednesday. The Nasdaq composite ticked up 0.1 percent.
The Stoxx Europe 600 closed with a 0.6 percent gain.
Oil prices continued to fall, with West Texas Intermediate, the U.S. crude benchmark, down as much as 3.8 percent to $67.91 a barrel.
Spirit Airlines said it expected flight cancellations to ease by Thursday. The airline canceled more than 60 percent of flights on Tuesday and had scrapped about 60 percent of Wednesday’s flights as of late afternoon, according to the flight-tracking website FlightAware. Spirit said in a statement that it had done a “thorough reboot of the network” and blamed the disruption, which began over the weekend and has affected hundreds of flights each day, on “overlapping operational challenges including weather, system outages and staffing shortages.” The airline’s shares fell about 3.8 percent.
Lyft fell 10.6 percent on Wednesday. Despite reporting strong growth for the second quarter on Tuesday, it lost $251.9 million.
Uber fell 5.6 percent in after-hours trading after it published its company results. It made a profit of $1.1 billion in the last quarter, but after adjusting for a one-time gain its losses were $509 million.
Shares of General Motors fell 9 percent. The company reported a jump in profit in the second quarter, but G.M.’s chief executive, Mary T. Barra, said a global shortage of computer chips would continue to be a problem until next year.