Shares of controversial trading app Robinhood are surging right now
Shares in the Robinhood trading platform are currently up 82% after the company launched on the Nasdaq last week.
The initial launch was disappointing, but over the last couple of days the company’s stock has fluctuated wildly.
Some are speculating that the same ‘meme stock’ frenzy that surrounded video game retailer Gamestop in March is now being applied to Robinhood.
Ironically, it was Robinhood’s fee-free platform that allowed meme stocks to flourish.
WallStreetBets, the Reddit community behind the volatile stocks, has been discussing Robinhood since it went public.
Robinhood was founded in Silicon Valley in 2013 and became popular during lockdown as amateur investors began to use it.
But the decision to offer commission-free trading has made it controversial with established finance companies who fear it may become the subject of regulatory involvement. In June, it was fined $70 million by a US regulatory body which deemed it harmed thousands of consumers through ‘false and misleading’ communications.
Still, so-called retail investors seem to be piling in on Robinhood stock, which has jumped tenfold in the last 24 hours.
‘This speaks to massive retail interest in this name at the moment and is an eye popping move for Robinhood that reminds investors of the ‘meme stock’ phenomenon,’ Dan Ives, an analyst at Wedbush Securities, told the BBC.
MORE : Stock trading apps: how do they work and which should you use?
MORE : GameStop: Trading apps suspend purchases as investors continue to battle Wall Street hedge funds