Trading in Robinhood halted after surge in stock price

Trading in Robinhood halted after surge in stock price
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Trading in online investment platform Robinhood was temporarily halted Wednesday after a rapid surge in its stock price just a week after the company’s lackluster debut on the Nasdaq. 

CNBC reported that shares of Robinhood reached $85 at one point Wednesday, an 81 percent increase from Tuesday’s closing price. 

Early Wednesday, 39 million shares of Robinhood’s stock had already been traded, more than half of its 30-day average volume of 64.2 million shares. 

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Robinhood experienced its highest volume on its IPO debut when 102.5 million shares were traded, according to CNBC. 

While it was not explicitly clear to analysts what prompted the stock surge Wednesday, CNBC noted that ARK Invest’s Cathie Wood purchased 89,622 shares of HOOD in ARK Fintech Innovation ETF, a position worth approximately $4.2 million. 

Wood had previously purchased 3.15 million Robinhood shares since its IPO debut last week. 

Robinhood, which started trading at $38 per share latest week, closed in its public debut down more than 8 percent, ending the session with a share price of $34.82. 

The IPO had attracted widespread anticipation, especially following this year's surge in activity among traditionally shorted stocks that became favorites among amateur investors and Reddit users, including AMC and Gamestop. 

While many have praised Robinhood for opening up the stock market to new segments of the population, others have cautioned that the platform does not have in place sufficient safeguards and have argued that it fuels overly speculative trading, especially for “meme” stocks, cryptocurrency and derivatives.

However, Robinhood CEO and co-founder Vlad Tenev has repeatedly defended his platform and its users who invest in companies popularized on Reddit, telling CNBC last week, “I think it’s a real thing. There’s customers that love these companies, they want them to thrive.” 

“You’re seeing [meme stocks] also get resources that allow them to hire really good management teams, in some cases, and then build for the future,” he added.