After months of speculation, Robinhood Markets Inc finally started trading on the Nasdaq Stock Exchange on Thursday in what turned out to be a disappointing debut. The fintech firm had priced its IPO at $38 a share, and only a day later, the stock is exchanging hands at a much lower $34 a share, at the time of writing.
Kevin O’Leary’s remarks on CNBC’s “Squawk Box”
Robinhood is facing renewed criticism after its dull IPO, but the ‘for’ team is keeping its own. One such argument came from Kevin O’Leary of Beanstox, who is confident that Robinhood is here to stay. On CNBC’s “Squawk Box”, he said:
“One thing you can’t do on Robinhood is short stocks. The platform is trying to protect investors and teach them how to invest. In terms of regulators and fines, every single money centre bank has been fined in the past years. Sometimes, they break the rules, and that’s why we have regulations. But at the end of the day, 20 million accounts say Robinhood is here to stay.”
O’Leary lauded Robinhood for trying to democratize investing as he revealed that he was a shareholder.
Henry Blodget says Robinhood is a speculation app
Insider CEO Henry Blodget also acknowledged on CNBC’s “Squawk Box” that Robinhood has had exponential growth over the past year but attributed it entirely to speculation.
“We had enormous speculation in crypto in the first quarter. That’s cooled off a little bit. Speculation, in general, seems to be cooling off a bit. So, the disappointing debut wasn’t surprising,” Blodget commented.
He also emphasized how individual investors versus institutional ones often mistakenly take IPOs as free money, thinking “there’s always a pop” – that didn’t happen with Robinhood.
“I think Robinhood’s whole story, the democratization of finance and all is a very noble aim. But this is a speculation app. It is terrific in a way that it removes lots of friction, makes it seem very fun when the markets are going up. But things do eventually change in the cycle, and when it turns, it’s brutal. Unfortunately, we’re going to see that at some point,” Blodget added.
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Wajeeh Khan
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