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Robinhood (HOOD) +8% as surprise share sale date pushed back
Robinhood (HOOD) traded 8% higher on Friday after it said that plans for shareholders to sell 97 million shares will not be effective until the SEC declares it later this month.
Robinhood (HOOD) closed 8% up on Friday after it said that stockholders who have bought into the company since its IPO will have to wait another nine days before selling their shares.
An SEC filing from Robinhood’s biggest shareholders suggested that around 97 million shares would be sold from Thursday (5th August), with the news prompting a sharp 27% decline in stock price.
However, Robinhood announced on Friday that it would take a while before the SEC declares the ‘Resale S-1’ to be effective.
It added: “Robinhood is not itself selling any additional securities but filed the Resale S-1 on behalf of certain of its shareholders pursuant to a pre-existing contractual obligation.”
The saga capped a volatile week for Robinhood following its market debut on 29th July when its shares opened at $38 but slumped to $34.82 by close for a $29bn valuation.
Robinhood’s stock then surged 38% on Tuesday (2nd August) and rose a further 50% on Wednesday before Thursday’s news brought it crashing back down.
There had been fears that the surprise sale announcement would increase the supply of stock and have a negative impact on the share price.
Analyst Jim Cramer is cautiously optimistic about Robinhood after claiming that he endorses it based on “what it can become” rather than its current standing.
Robinhood hit the mainstream headlines earlier this year when its app was used extensively by investors trading ‘meme’ stocks.
At one point, the broker was forced to restrict trading for GameStop (GME) shares as it looked to secure enough credit to clear a huge number of trades from new accounts.
Friday’s trading was the latest upswing for HOOD as shares climbed 7.93% to $55.01 by close on the Nasdaq.
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