Robinhood IPO meets soft demand on Wall Street, Redditors are not as interested

  • Robinhood prices its initial public offering at the low end of the price range, $38 each.
  • There is negativity on stock investment subreddits since the commission-free trading exchange platform was engulfed in scandals in early 2021.
  • On 28 July, the exchange announced that regulators are investigating CEO Vlad Tenev. 

Crypto traders are looking forward to Robinhood’s roll-out of a new feature promising to protect investors from volatility. Institutional investors were wary and sat out of the IPO. 

Robinhood tests feature to protect traders from volatility while facing a regulatory probe 

A day before launching its IPO, Robinhood, the commission-free trading and investing platform, revealed that CEO Vlad Tenev is under investigation by the Financial Industry Regulatory Authority (FINRA). Regulatory authorities are scrutinizing Tenev to confirm whether he is licensed by FINRA.

While the probe continues, Robinhood’s IPO is now complete, and the exchange has raised $1.9 billion from investors. It’s important to note that when the eight-year-old firm had announced its public offering, subreddits including r/WallStreetBets and r/StockMarket were encouraging investors to ignore it. 

A post on r/Superstonk, a subreddit with 543,000 members, reads,

Robinhood IPO is set to be on the market on Thursday. DO NOT GO NEAR IT!!!

The negativity around the exchange started in January 2021 when Robinhood got entangled in scandalous meme stock rallies. The company earned a reputation as a ‘Gateway to meme stocks’ when its app halted trading in specific stocks, including GameStop, at the height of their price rally, leaving users infuriated and attracting attention from regulators. 

Alexandria Ocasio-Cortez, US Representative, tweeted, 

The exchanges’ brush-off with regulators raised flags for institutional investors who stayed on the sidelines during the IPO for fear of a further regulatory crackdown. 

To win back investors’ trust and interest in its platform, the zero-fee trading exchange is reportedly working on a new feature to protect traders from crypto price volatility. It is labeled ‘price volatility protection.’ A Bloomberg report based on Steve Moser, an iOS developer’s analysis of new code in a beta version of Robinhood’s app, states that it contains a message:

To protect your orders against price volatility, we may sometimes skip your recurring orders or buy less than your chosen amount.

Investors are considering Robinhood’s long-anticipated IPO success a watershed moment for the fintech industry and crypto, as it joins the league of several crypto companies that are now public, like Coinbase Global Inc. However, the zero-commission exchange is not out of regulatory crosshairs. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Experts say Ripple will win SEC lawsuit, which might propel XRP to new all-time highs

Since XRPArmy and lawyers in the crypto ecosystem consider the US Securities & and Exchange Commission’s (SEC) move to pull documents out of public view as evidence that the case is coming to a close, a Ripple win appears more likely.

More Ripple news

Bitcoin Weekly Forecast: BTC must hold $45K to target new all-time highs

Bitcoin price is on a rollercoaster ride as it crashed violently on September 7, consolidated for a few days after that and went on an uptrend to undo the losses. Over the past 24 hours, however, BTC seems to be consolidating for a volatile move without a clear directional bias.

More Bitcoin News

Chiliz price to retrace before CHZ runs up

Chiliz price is stuck in a tight consolidation above a crucial support floor and shows no signs of recovering from this slump. In fact, CHZ might retrace lower before heading on an uptrend.

More Chiliz News

ICX Price Prediction: ICON prepares for 20% descent as bulls fade away

ICON price looks ready for a swift downswing after an explosive run over the past ten days. The crypto markets’ slowdown after the recent run-up makes this bearish scenario a perfect fit. Going forward, investors can expect ICX to head lower and retest stable support barriers.

More Cryptocurrencies News


Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast