Robinhood Ranks as Top Trade on Fidelity Upon Debut

Robinhood may not have had its IPO ‘pop,’ but retail investors are buying the dip, showing that market confidence for the trading app is high.

article-image

Source: Shutterstock

share

key takeaways

  • Robinhood was the top trade on Fidelity’s retail platform following its public market debut Thursday
  • The trading app fell more than 8% at the close Thursday, but retail interest remains strong

In one of the most highly anticipated initial public offerings (IPO) of the year, zero-fee stock trading app Robinhood made its public market debut Thursday. 

Shares of the popular retail trading platform (ticker HOOD) closed more than 8% lower Thursday after ranking as the top trade on Fidelity’s retail platform earlier in the session. There were 38,000 total HOOD transactions on Fidelity Thursday, and 81% were ‘buys,’ showing that the age-old sentiment “buy the dip” is alive and well. 

“‘Buy the dip’ is obviously an old phrase, it goes back well before retail traders, or at least this version of retail traders, had online trading,” said Nicholas Colas, co-founder of DataTrek Research. “It basically is just a fundamental indicator of confidence in the market, when you see stocks pull back, you have enough people come in to buy them that it forms a base, the stock stops going down, confidence is renewed and things move on from there.” 

It’s not like the most academically rigorous concept, Colas admitted, but watching dip buys can reveal a lot about market sentiment. If a stock goes down, do investors have confidence in the name enough to buy? 

“It is an asymmetric but interesting indicator of market confidence that people will step in to buy when a stock is down,” said Colas. 

Typically, IPOs are priced to encourage a ‘pop,’ or a significant, usually 10% to 15%, increase in the first days of trading. When a stock doesn’t hit this target, it is usually seen as an unsuccessful debut with weak investor demand. In the case of Robinhood, however, the opposite may be true. 

“When an IPO breaks so quickly after the first print, that’s not a great sign,” said Colas. “So, seeing people buy Robinhood, especially on a quasi-busted IPO, is a real sign of confidence that they believe in that business model and believe in the future of the company.” 

Robinhood, founded in 2013, has fundamentally changed retail trading. When the startup launched, most online brokerages charged around $5 to $8 per trade, at least. Robinhood’s zero-fee platform was disruptive enough to force other platforms to do the same. 

Robhinhood’s success, Colas believes, revolves around whether or not the company can expand on retail trading and find new areas of disruption. 

“I’m a big believer in the power of the retail model, and the same thing goes for Coinbase, for example, I think there is a large future for that kind of company,” Colas said. “It does revolve around how much they can get beyond just being a stock trading platform, same with Coinbase, for that matter, but it will be a matter of what else they can do with that to engage their customers.” 

As of 11:20AM Friday, Robinhood was ranked fourth on Fidelity’s platform with 9,165 trades, 7,180 of which were buys. Shares were trading at $36.30 at time of publication, down from its opening price of $38.

Want more investor-focused content on digital assets? Join us September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. Buy it now.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

HYATT REGENCY SALT LAKE CITY

TUES, OCT. 8, 2024

Guided by the expertise of Blockworks Research Analysts team, this one day event will feature senior leaders, entrepreneurs, and developers from across the crypto industry. Attendees will have the opportunity to participate in an immersive experience to explore the latest trends, […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report cover graphics (1).jpg

Research

Wormhole is a suite of open-source, permissionless protocols used to move assets and queries across blockchains.  Despite being a common misconception, Wormhole is not just a token bridge. Nevertheless, protocols can build token bridges on top of Wormhole by leveraging the cross-chain messaging provided.

article-image

Ether is a commodity just up until the point it is not, or, ether is not a commodity just up until the point it is — whichever you prefer

article-image

The bull-market conference was filled with good feelings but little clarity on where the crypto industry is headed next

article-image

The Friday ruling was issued as a default judgment because Sameer Ramani “appears to have fled the country”

article-image

Bitcoin’s previous record high against the Euro was set in September 2021

article-image

As bitcoin ETFs grow larger and more liquid, due diligence teams at wirehouses and other investment firms are more likely to clear them, Bitwise researcher says

article-image

Sponsored

The TRON DAO team attended ETH Denver, one of the leading events in the blockchain space