Shares of Robinhood soared as much as 29% on Tuesday to a post-IPO record high of $48.59 as long-term investors like Cathie Wood's Ark Invest begin to build a position in the fintech platform.
Robinhood experienced a choppy debut last week, with shares falling as much as 12% from its IPO price of $38 per share. The IPO was unique in that Robinhood allocated shares to its user base, allowing retail investors to get in on the ground level. That access is typically reserved for institutional investors and their clients.
Ark Invest has built a near-$250 million stake in Robinhood since it went public last week. Across Ark Invest's Disruptive Innovation, Next Generation Internet, and Fintech Innovation ETFs, the firm owns more than 6 million shares of Robinhood.
But not all are bullish on Robinhood, with David Trainer of New Constructs arguing that Robinhood is worth no more than $9 billion, representing downside potential of more than 75% from current levels.
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"The mounting regulatory risk Robinhood faces makes us concerned that the public may see Robinhood's stated goal to 'democratize investing' as a ruse to lure them into speculative trading and gambling that benefits Robinhood more than the individual investor," Trainer said in a report last month.
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