Robinhood IPO Faces Threat of Retail Snub on Reddit

"Just ignore the Robinhood IPO entirely," said a post on the r/Superstonk subreddit.

By Reuters | Updated: 8 July 2021 10:58 IST

Robinhood IPO Faces Threat of Retail Snub on Reddit

Robinhood came under scrutiny after this year's trading frenzy in so-called meme stocks such as GameStop

Highlights

Robinhood has reserved shares in the IPO for retail investors
Robinhood experienced cryptocurrency trading
Robinhood filed for its widely anticipated market flotation last week

Online brokerage Robinhood, which helped enable the "meme stock" frenzy earlier this year and later attracted flak for its handling of the trading mania, is facing pushback on social media forums against its initial public offering.

Many individual investors are planning to shun the stock market debut, and several posts in recent days urging users to not buy into the IPO have received thousands of upvotes, discussions in online forums on Reddit showed.

"Just ignore the Robinhood IPO entirely," said a post on the r/Superstonk subreddit, which also advised traders to transfer out to Fidelity's trading platform.

Samsung Wins Patent for a Tri-Fold Smartphone With Specialised Barrier Layer for Improved Durability

Robinhood, which has reserved shares in the IPO for retail investors, declined to comment.

The company came under scrutiny after this year's trading frenzy in the so-called meme stocks such as GameStop. Its handling of the frenzy, marred with glitches and followed by trading restrictions, attracted the wrath of many of its users and US lawmakers.

Since then, a number of threads on social media forums have called for users to boycott the platform entirely.

Robinhood Fined $70 Million for Misleading 'Millions'

"Just forget Robinhood altogether. Let them go down in lawsuits and loss of customer base," said another recent post with more than 7,000 upvotes.

Another Redditor said, "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 experienced cryptocurrency trading and display issues on its platform for about an hour late on Friday.

Last week, Robinhood filed for its widely anticipated market flotation that revealed massive user growth while also flagging a number of investigations by prosecutors and regulators.

Earlier this year, the trading app operator launched a new platform to provide retail investors with the opportunity to buy shares in IPOs. Robinhood is reserving 20 percent to 35 percent of its IPO shares for such investors.

In its IPO filing, the company also warned investors that it could become a meme stock, saying that large participation from retail investors could trigger volatility in the trading price of its stock.

Windows 11 has been unveiled, but do you need it? We discussed this on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.