Robinhood IPO Faces Threat of Retail Snub on Reddit

Online brokerage Robinhood, which helped allow the “meme stock” frenzy earlier this 12 months and later attracted flak for its dealing with of the buying and selling mania, is going through pushback on social media boards towards its preliminary public providing.

Many particular person traders are planning to shun the inventory market debut, and a number of other posts in current days urging customers to not purchase into the IPO have obtained hundreds of upvotes, discussions in on-line boards on Reddit confirmed.

“Just ignore the Robinhood IPO entirely,” stated a put up on the r/Superstonk subreddit, which additionally suggested merchants to switch out to Fidelity’s buying and selling platform.

Robinhood, which has reserved shares within the IPO for retail traders, declined to remark.

The firm got here underneath scrutiny after this 12 months’s buying and selling frenzy within the so-called meme shares reminiscent of GameStop. Its dealing with of the frenzy, marred with glitches and adopted by buying and selling restrictions, attracted the wrath of a lot of its customers and US lawmakers.

Since then, quite a lot of threads on social media boards have referred to as for customers to boycott the platform fully.

“Just forget Robinhood altogether. Let them go down in lawsuits and loss of customer base,” stated one other current put up with greater than 7,000 upvotes.

Another Redditor stated, “Robinhood has not even been able to keep their app working properly, has not been able to fill orders promptly, has consistently provided incorrect info to users about their trades.”

Robinhood skilled cryptocurrency buying and selling and show points on its platform for about an hour late on Friday.

Last week, Robinhood filed for its extensively anticipated market flotation that exposed huge person development whereas additionally flagging quite a lot of investigations by prosecutors and regulators.

Earlier this 12 months, the buying and selling app operator launched a brand new platform to supply retail traders with the chance to purchase shares in IPOs. Robinhood is reserving 20 p.c to 35 p.c of its IPO shares for such traders.

In its IPO submitting, the corporate additionally warned traders that it may turn into a meme inventory, saying that enormous participation from retail traders may set off volatility within the buying and selling value of its inventory.

© Thomson Reuters 2021