FirstFT: Robinhood soars after traders flock to shares

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Robinhood, the trading app used by many retail investors to drive the furious rally in “meme stocks” this year, has gained characteristics of a meme stock itself.

Shares of the brokerage rose 50 per cent to close at $70.39 on Wednesday, giving it a market capitalisation of $58.9bn. The volatility prompted multiple trading halts on the Nasdaq exchange, with Robinhood at one stage having surged as much as 82 per cent.

The rise came less than a week after Robinhood listed in a disappointing initial public offering. This week’s reversal reflected the embrace of the stock by retail investors on social media and the new availability of options contracts tied to Robinhood’s shares, traders and analysts said. By 4pm in New York, more than 171m shares had changed hands.

The California-based company’s app was a central venue for trading so-called meme stocks, as customers organised on social media platforms such as Reddit to bid up stocks like the distressed theatre chain AMC and the video game retailer GameStop.

Thanks for reading FirstFT Asia. Have you invested in any “meme stocks” this year? Or if you have avoided them, how come? I’d love to hear your thoughts. You can reach me at emily.goldberg@ft.com. — Emily 

Line chart of Share price ($) showing Robinhood shares surge in volatile trade

Five more stories in the news

1. Uber’s weaker than expected earnings report Heavy spending on incentives to address driver shortages weighed on Uber’s rideshare business, dragging down its overall performance as it continues to deal with the effects of the pandemic.

2. Archegos employees face losing up to $500m in bonuses Employees of Archegos Capital Management face losses of about half a billion dollars after the value of a deferred pay plan set up by the firm crashed along with its other investments.

3. SoftBank acquires $5bn stake in Roche The Japanese tech group has acquired a $5bn non-voting stake in Swiss drugmaker Roche through its unit that was responsible for the “Nasdaq whale” trade, according to two people with knowledge of the transaction. 

4. The Fed sketches out conditions for scaling back monetary support Richard Clarida, vice-chair of the US central bank, on Wednesday laid the foundation for the scaling back of the Fed’s $120bn asset purchase programme and an interest rate increase in 2023, which would be its first since slashing rates to zero at the onset of the pandemic.

5. DoorDash in talks to invest in grocery app Gorillas The biggest US food delivery group is preparing to make its first investment in Europe by taking a stake in Gorillas, the fast-growing German grocery delivery app. The deal could close later this month, according to people familiar with the plans. The size of DoorDash’s stake remains unknown as talks with investors continue.

Tokyo Olympics round-up

Japan’s Sakura Yosozumi
Japan’s Sakura Yosozumi, 19, won the women’s Park competition in skateboarding, capping a dominant display for the host country in the sport’s Olympics debut © AFP via Getty Images
  • Japan’s teenage skateboarders continue to dominate the Olympic competition. Sakura Yosozumi, 19, won the women’s Park competition yesterday, followed by compatriot Kokona Hiraki, 12, who won silver.

  • Jamaica’s Elaine Thompson-Herah ran the second-fastest 200m sprint in women’s history to clinch gold. She also won the 100m event.

  • Sifan Hassan, who arrived in the Netherlands as a 15-year old refugee from Ethiopia, is embarking on an unprecedented challenge to win the 1500m and 10,000m races after blowing away her rivals in the 5000m final.

  • The Olympic bubble has prevented the spread of Covid-19 by athletes and officials, but there has been a collapse in public vigilance, says the doctor leading Japan’s response.

Add ‘Tokyo Olympics’ to myFT for all our coverage from the Games, and don’t miss our “alternative medals table”.

Coronavirus digest

  • Daily coronavirus infections are rising in India again after weeks of steady decline, fuelling anxieties about the threat of a third wave in the country.

  • The UK’s Covid-19 vaccination programme is to be extended to 16- and 17-year-olds.

  • The WHO urges wealthy nations to hold off on Covid booster shots until at least the end of September as severe shortages hit lower-income countries.

  • Full vaccination halves the transmission of the Delta variant of coronavirus and is 60 per cent effective at preventing symptoms of Covid-19, according to new research.

Without the correct absorption capacity — the infrastructure to get jabs in arms — Covid-19 vaccines will go to waste, writes Tony Blair, former UK prime minister. Sign up for our Coronavirus Business Update newsletter and follow the latest developments on our live blog.

The day ahead

Hong Kong pro-democracy singer in court Anthony Wong will appear in a Hong Kong court today after he was charged on Monday with “corrupt conduct”. The charges stem from a 2018 election rally where Wong provided “entertainment to induce others to vote” for pro-democracy activist, according to Hong Kong’s anti-corruption watchdog. (Reuters)

Earnings Among the companies reporting earnings today are Nintendo, Lufthansa, Bayer and Siemens. Read the full list here.

Bank of England interest rate decision UK interest rate setters will have a lot of explaining to do when they publish their latest decision along with an updated assessment of the economic outlook on Thursday.

What else we’re reading

Afghanistan after the US Kabul is bracing for a siege after the US retreat led the Taliban to launch attacks across the country, undercutting its incentive to negotiate a political settlement. The question now is whether the Islamist insurgents’ strength makes the collapse of the government inevitable.

Olympic sponsors need to ‘walk the talk’ on values The rise of a new generation of activist athletes, including Japanese tennis star Naomi Osaka and US gymnast Simone Biles, requires companies to take a stand on wider issues such as racial injustice and gender inequality. This presents a challenge for the traditional Japanese approach to the world of sports marketing, writes Kana Inagaki.

Watch: How to build an artificial tree A tiny start-up founded by three Stanford graduates believes its lab holds the secret to reducing climate change. This video shows how their technology turns unwanted CO2 into useful products such as car parts, trainers, and alcohol.

Video: How to build an artificial tree

How Andrew Cuomo’s support melted away The New York governor’s political support is collapsing after a five-month investigation found that he had allegedly sexually harassed multiple women. Our New York correspondent Joshua Chaffin reported on how friends and allies, including Joe Biden, have distanced themselves from Cuomo.

All the lonely people — the power of connection Three books examine the perils of loneliness — a problem that has only intensified during the pandemic — and offer practical solutions as well as the salve of solidarity. Emma Jacobs, meanwhile, writes about how lockdowns have allowed us to reappraise our approach to drinking.

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