Robinhood jumped a whopping 50 per cent on Wednesday after a wave of individual investors joined the likes of Cathie Wood to pile on the zero-fee trading platform.
The stock traded as high as $85 in New York before trimming gains to close at $70.39 as the volatility triggered at least three trading halts. The frenzied share buying pushed the company’s market value to a peak of $65 billion from $29.1bn after its debut on Nasdaq last week.
‘We’ve seen this movie before and this pump and dump of Robinhood will not end well for many traders,” said Ed Moya, senior market analyst at Oanda Corp. “Robinhood’s revenue streams will come into question once the government applies rules to payment of order flow.”
Retail investors’ participation took off in the past couple of sessions after a lukewarm reception. They bought a net $19.4 million worth of Robinhood shares on Tuesday to make it the sixth-most-purchased stock and 11th-most-traded security on retail platforms, according to data compiled by Vanda Securities Pte.
Total retail volume on Tuesday surged about 10-fold from the previous day, the data show. In the first three hours of Wednesday’s session more than 100 million shares changed hands, more than five-times what was seen in recent days.
Trader chat rooms, such as those on StockTwits, and Twitter feeds were aflame with mentions of Robinhood’s surge. Users compared the surge to the massive rallies staged by so-called meme stocks like GameStop and AMC Entertainment earlier this year.
The stock was the most traded company on Fidelity’s platform, with more than 32,000 buy orders coming from customers. That’s almost double the number of buy orders seen for AMC Entertainment, which saw the second largest number of buys.
The retail investors trading boost came alongside Ark Investment Management’s move to increase stake in the company. Ark FinTech Innovation ETF bought 89,622 Robinhood shares in the previous session as they surged 24 per cent to close above their IPO price for the first time.
“This spike in the share price doesn’t change our view of shaky fundamentals and compounds the concern about order-flow payment revenue through 2022, after a 34 per cent drop in 2Q and a crypto-trading bump that’s unlikely to repeat in 3Q. Our analysis still points to a mid-$30 baseline share price,” said Julie Chariell, Bloomberg Intelligence senior FinTech industry analyst.
Some traders pointed out that partial options trading data for the company were coming through for the first time. The most actively traded options on Robinhood in Wednesday’s session were $70 calls that expire on August 20. A company cannot have options traded on its stock until at least three days after its IPO, and options activity may increase share price volatility.
Individual investors “love using options” that have likely gotten them more involved in Robinhood today, Matt Maley, chief market strategist at Miller Tabak, said. “When they buy these options, the dealer has to hedge themselves by buying the stock. When they buy a lot of call options, the whole thing feeds on itself for a while.”
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Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
RESULTS
6.30pm Handicap (TB) $68,000 (Dirt) 1,200m
Winner Canvassed, Par Dobbs (jockey), Doug Watson (trainer)
7.05pm Meydan Cup – Listed Handicap (TB) $88,000 (Turf) 2,810m
Winner Dubai Future, Frankie Dettori, Saeed bin Suroor
7.40pm UAE 2000 Guineas – Group 3 (TB) $125,000 (D) 1,600m
Winner Mouheeb, Ryan Curatolo, Nicholas Bachalard
8.15pm Firebreak Stakes – Group 3 (TB) $130,000 (D) 1,600m
Winner Secret Ambition, Tadhg O’Shea, Satish Seemar
9.50pm Meydan Classic – Conditions (TB) $$50,000 (T) 1,400m
Winner Topper Bill, Richard Mullen, Satish Seemar
9.25pm Dubai Sprint – Listed Handicap (TB) $88,000 (T) 1,200m
Winner Man Of Promise, William Buick, Charlie Appleby
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
Temple numbers
Expected completion: 2022
Height: 24 meters
Ground floor banquet hall: 370 square metres to accommodate about 750 people
Ground floor multipurpose hall: 92 square metres for up to 200 people
First floor main Prayer Hall: 465 square metres to hold 1,500 people at a time
First floor terrace areas: 2,30 square metres
Temple will be spread over 6,900 square metres
Structure includes two basements, ground and first floor
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