Robinhood (HOOD) is the fashionable banal market-trading app among young and first-time investors and traders. After the company's hyped IPO connected July 29, is Robinhood banal a buy successful the current banal marketplace weakness?
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Robinhood Stock IPO
On July 28, Robinhood priced 55 cardinal shares astatine $38 a share, raising $2.1 billion. But the pricing came in astatine the debased extremity of its expected range. The banal closed the time astatine 34.82, much than 8% beneath the IPO price.
The institution is known for pioneering commission-free banal trading with nary relationship minimums. The level allows users to marque unlimited commission-free trades successful stocks, exchange-traded funds, options and cryptocurrencies. Robinhood ranked among the best online banal brokers successful 2021 for Mobile Trading Platforms/Apps and Margin Investing/Interest Rate.
The app is fashionable among young and first-time investors and traders. Millions of young investors flocked to Robinhood during the meme-stocks trading mania for stocks similar GameStop (GME) and AMC Entertainment (AMC). Excitement astir cryptocurrencies similar Bitcoin besides fueled involvement successful the app.
"While we are lone six years into our journey, we person already seen profound transformations successful however radical deliberation astir their money," Chief Executive Vlad Tenev and Chief Creative Officer Baiju Bhatt said successful written remarks with the Robinhood IPO filing.
"The adjacent procreation of investors is younger and much divers than ever earlier and concern is present arsenic culturally applicable arsenic euphony and the arts," the executives said.
Robinhood Stock Fundamental Analysis
The institution had implicit 22 cardinal funded accounts astatine the extremity of the archetypal quarter. More than fractional of the customers' backing accounts said Robinhood was their archetypal brokerage account, the institution said. It has $81 cardinal successful assets nether control.
Robinhood reported its Q3 results connected Oct. 26 aft the marketplace close. The institution gave weaker-than-expected gross guidance aft missing estimates for the 3rd 4th arsenic retail trading enactment fell. Robinhood mislaid $2.06 a stock vs. a 5-cent nonaccomplishment a twelvemonth ago, though it's not wide if that's a comparable fig to expert estimates. Year implicit year, Q3 gross roseate 35% to $364.9 million, decidedly falling short.
HOOD Stock News
On Aug. 5, Robinhood said various shareholders volition sell up to 97.9 cardinal shares implicit time. The maximum selling terms for Robinhood banal volition beryllium 35.12 for the offering, which volition make proceeds for the shareholders of up to $3.44 billion. In response, Robinhood banal plunged implicit 27%, giving backmost a ample information of the erstwhile session's 50% surge.
On Aug. 31, SEC Chairman Gary Gensler said banning outgo for trades is an option. The apical banal marketplace regulator told Barron's that a ban connected outgo for bid travel successful "on the table." Because Robinhood doesn't complaint its users fees for trades, it generates gross by directing trades to definite marketplace makers successful instrumentality for a information of the profits.
Gensler told Barron's the signifier has "an inherent struggle of interest," noting that SEC unit could travel retired with proposals successful the coming months. "They get the data, they get the archetypal look, they get to lucifer disconnected buyers and sellers retired of that bid flow. That whitethorn not beryllium the astir businesslike markets for the 2020s."
Gensler added: "I'm raising this due to the fact that it's connected the table. This is precise clear."
Robinhood Stock Price And Technical Analysis
Robinhood banal terms slid astir 3% Monday, trading astir 19.55. Shares are astatine caller all-time lows. Early Monday, Goldman Sachs lowered its terms people from 42 to 31, portion keeping a neutral rating.
HOOD banal is astir 77% disconnected the all-time precocious acceptable connected Aug. 4 astatine 85. Keep an oculus retired for a new base to form, which would connection the stock's archetypal buy point.
According to the IBD Stock Checkup, HOOD stock shows a anemic 9 retired of a cleanable 99 IBD Composite Rating. The Composite Rating helps investors easy measurement a stock's cardinal and method metrics. Weak IBD Composite Ratings are mean for caller issues.
Is Robinhood Stock A Buy Right Now?
Robinhood banal is 1 of the apical IPO stocks to ticker successful the current banal marketplace action. The institution boasts coagulated income maturation successful caller quarters, and the company's imaginable is encouraging amid the surging popularity of banal trading among young investors. Shares are acold from their post-IPO highs and determination is nary existent bargain point, truthful the banal isn't a bargain close now. Wait for the banal to signifier its archetypal base, which would connection an initial bargain point.
For much starring stocks and stocks approaching bargain points, cheque retired IBD Stock Lists, similar Stocks Near A Buy Zone. To spot the existent banal marketplace trend, cheque retired IBD's signature regular analysis, The Big Picture.
Be definite to travel Scott Lehtonen connected Twitter at @IBD_SLehtonen for much connected maturation stocks and the Dow Jones Industrial Average.
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