Robinhood's initial public offering (IPO) is scheduled for Thursday, and the investing app is betting big on its users by letting them buy up to a third of its shares before it begins trading on the Nasdaq. But on forums including Reddit, Twitter and other social platforms, the individual investors and traders who would seemingly make up a core constituency of Robinhood's 18 million user accounts say they aren't interested.
In fact, many users on popular subreddits including r/WallStreetBets and r/StockMarket are encouraging their fellow investors to ignore the move completely.
"Robinhood IPO is set to be on the market on Thursday," reads one post on r/Superstonk, a reference to a Reddit term for stocks. "DO NOT GO NEAR IT!!!"
Some of the negativity can be traced back to the beginning of this year, when the platform was engulfed in multiple scandals related to meme stock rallies. The app halted users' ability to trade certain stocks, including GameStop, at the height of the frenzy, infuriating users who felt betrayed by a company whose stated mission is to democratize investing.
"Hood? Their ticker symbol should've been ROB," one r/WallStreetBets user wrote, referring to the fact Robinhood will trade under HOOD.
Robinhood declined to comment for this article. The stock trading app will be priced at an expected $38 to $42 per share.
Investors also point to the app's problems with functionality and giving users incorrect account information — both issues that are part of the reason the company was recently fined a record $70 million by FINRA, Wall Street's self-regulatory agency — as other reasons not to invest when Robinhood goes public.
Also worrying investors: Robinhood said in its IPO filing it is facing approximately 50 lawsuits related to the meme stock trading restrictions. Just this week, the company acknowledged that FINRA and the Securities and Exchange Commission are currently investigating employee trades involving meme stocks, and the fact that its CEO Vlad Tenev is not licensed by FINRA. Other investigations are open with state attorneys general and the U.S. Department of Justice.
Robinhood acknowledged in its IPO filing that individual investors could turn the company itself into the next meme stock by attempting to short it. But, at least on Reddit forums, users are encouraging others not to attempt to do so.
Of course, grumblings on Reddit doesn't mean individual investors aren't interested. While many of the comments on online forums were negative, some investors do see a silver lining.
"Opening the door to investing to the general public, is actually something Robinhood should largely be credited for," a r/WallStreetBets user wrote on a recent thread. "From a consumer point of view (other than the manipulation and [payment for order flow]), the door Robinhood has opened is exactly what was missing for along [sic] time."