Robinhood shares fly again, soaring as much as 80%

NEW YORK — Robinhood’s stock is flying again Wednesday, jumping so much that trading was temporarily halted three times in the first half hour after the market opened.

Robinhood Markets was up 28.5% at $60.15, as of 10:47 a.m. Eastern time, accelerating what’s already been a blistering week of gains. At one point the stock was up 80%. It’s a sharp turnaround from the lackluster debut last week, when Robinhood’s stock dropped 8.4% from its initial price of $38 on Thursday.

Even ahead of its initial public offering, experts warned that Robinhood’s stock could be primed for a more jagged ride than others on Wall Street because of its popularity among smaller investors.

Robinhood reserved a bigger-than-usual chunk of its IPO shares for smaller investors, which fits with its mission of “democratizing finance.” The company has introduced a new generation of younger and smaller-pocketed investors to the stock market, thanks to its zero-trading fees and easy-to-use app. But the move also gave fewer shares to big institutional investors, who have more of a reputation for holding onto a stock for the long term.

Robinhood has found support from some big names on Wall Street. Cathie Wood, a star stock picker who focuses on innovative companies, has bought shares, for example.

Her flagship ARK Innovation exchange-traded fund owns nearly 4.9 million shares, putting Robinhood within the fund’s top 30 holdings. The fund has about $25.5 billion in total assets.

Robinhood has created plenty of passion, among users and critics alike, and the polarizing effect has sent its stock on a wild ride in its short time on Wall Street. After opening at $38 last week, it sank as low as $34.82. It took less than four days to more than double, touching $85 earlier Wednesday morning before paring its gain.

Robinhood is already delivering the strong growth that Wall Street is always hungry for: Revenue soared 245% last year to $959 million. It has amassed an estimated 22.5 million funded accounts since its 2013 founding. More than half its customers are first-time investors, and Robinhood gives them greater ability to keep up with the stock-holding, wealthier households that had been pulling away for years.

But Robinhood has also drawn heaps of criticism, and has paid more than $130 million in recent years to settle a list of accusations by regulators. Critics say Robinhood encourages unsophisticated investors to make trades too often that may be too risky, and the regulatory scrutiny is likely to stay high.

Some users are also still angry at Robinhood and other brokerages for temporarily barring them from trading shares of GameStop early this year, when soaring moves for it and other “meme stocks” were shaking Wall Street. But Robinhood may be turning into something of a meme stock itself.

“I hate Robinhood, but I got in and made $1k in 20 minutes,” said one user on Reddit’s WallStreetBets forum, a central hub for the explosion of meme stocks this year.