But the company’s early days didn’t burn the stock charts. What happened?
Robinhood priced at $ 38 per share this week, opened flat and closed its first day of trading yesterday for $ 34.82 per share, or just over 8% underwater. The company posted a mixed picture today, falling early before regaining balance late in the morning.
It wasn’t the start that some expected Robinhood to have.
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To close the week, we’re not going to dwell on banned Chinese IPOs or have a full week’s mega talk. Instead, let’s analyze a few notes from a conversation The Exchange had with Robinhood’s CFO about his company’s IPO, and go over some reasonable guesses as to why we’re not wondering how much. Robinhood left money on the table by setting its public offering at a price lower than this. closed on the first day.
Let’s not be dumb about it. Time for jokes on twitter was yesterday. We’re going to put on our thinking hats this morning.
Why Robinhood went public when it did
In chatting with Robinhood CFO Jason Warnick earlier this week, we wanted to know why now is the right time for Robinhood to go public.
Now, no CEO or CFO of a public company will directly say they’re going public because they think they can defend – or extend – their most recent private valuation thanks to current market conditions.
Instead, executives on the day of the IPO tend to deflect the issue, turning to a well-oiled joke about how their public offering is just a step on their company’s long-term trajectory. . For some reason in our capitalist society, at an arch-capitalist event, hosted by a for-profit company, executives find it essential to downplay the importance of their IPO.1
With that in mind, Warnick didn’t say Robinhood went public because the IPO market recently rewarded big consumer tech companies like Airbnb and DoorDash with solid beginnings. And he didn’t say that with tech stocks near all-time highs and a taste for high-growth concerns, the company was likely ready to enter a market that would be willing to price at a valuation that it. found attractive.