Business Maverick: Robinhood Gave Its Customers Access to IPOs That All Flopped

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Robinhood Markets Inc. Chief Executive Vlad Tenev was fielding questions on the company’s latest earnings call when one person asked about a dormant project.

When, the caller wanted to know, would Robinhood resume letting customers invest in initial public offerings?The initiative, which allowed users to buy shares of buzzy companies like Sweetgreen Inc. and Allbirds Inc. before they debuted on stock exchanges, resulted in losses for customers who still hold the shares. In an already dismal market for IPOs, those offered by Robinhood have performed even worse.

All 23 IPOs that Robinhood opened up to its customers have declined by double-digit percentages since the stocks debuted. Five — Iris Energy Ltd., Sono Group NV, Vaxxinity Inc., Stronghold Digital Mining Inc. and Argo Blockchain Plc — lost at least 89% of their value.“As soon as the IPO market turns around and we see more IPOs that meet those criteria, we’re going to be hard at work to bring those to our customers,” Tenev, 35, said on the call.

Robinhood’s own IPO in July 2021 was among those offered to its clients, and it hasn’t gone well. More than 300,000 users bought the shares for $38, and those who held on to their positions have gotten clobbered. The stock tumbled 10% to $10.78 at 10:15 a.m. in New York, extending its decline since the IPO to 72%.

Robinhood announced two rounds of job cuts this year, dismissing more than 1,000 employees, and plans to shutter seven offices.

 

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