Robinhood shares surge in meta-meme stock frenzy
Less than a week after an underwhelming stock market debut, shares of Robinhood soared as much as 81 percent on Wednesday, in what could be the first example of a meta-meme stock.
The online brokerage - popular with younger retail traders who ignited the "meme stock" phenomenon - went public last Thursday with disappointing results, closing below its IPO price.
But this week, Robinhood was by far the most mentioned stock on WallStreetBets, the Reddit platform at the center of this year's meme stock rally, which bid up shares of companies such as GameStop, AMC Entertainment and Blackberry.
In late January, Robinhood became the focus of controversy after freezing trades for meme stocks like GameStop and AMC, saying at the time that it didn't have the funds to cover all the bets amid the buying frenzy.
On Wednesday, trading of Robinhood shares was halted due to market volatility, and the stock later fell back to Earth but still rose more than 40 percent.
Wednesday also marked the first day investors could trade options on Robinhood shares, offering them another way of betting on the stock. Options trades by retail investors have contributed to outsize moves in the shares of other companies in recent months, including GameStop and AMC.
In a sign of the volatility, data from Trade Alert showed retail investors made options bets on Robinhood making major moves in either direction.
Bets on Robinhood shares rising above $70 by mid-August were the most actively traded contract, while bets on the stock falling below $20 by mid-August were the second most actively traded contract.
