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Crypto-friendly app Robinhood loses 8% in public Nasdaq debut

Shares of cryptocurrency-friendly trading app Robinhood dropped more than 8% in its public Nasdaq debut on Thursday, marking one of the worst initial public offering (IPO) debuts of its size.

Robinhood’s HOOD stock tumbled 8.4% below the IPO price in the company’s first trading session on Thursday, dropping from $38 to $34.82. The company went public on Nasdaq at a $32 billion valuation to see its market capitalization fall to $29 billion after the HOOD stock ended the session below $35.

According to data compiled by Bloomberg, the company’s first trading day marked the worst debut on record among 51 firms in the United States that raised as much cash as Robinhood or more. The company reportedly flipped the 2007 IPO by MF Global Holdings brokerage as the worst debut among qualifying firms, which ended its first day down 8.2%.

According to a CNBC report, Robinhood sold 52.4 million shares, raising nearly $2 billion, with co-founders Vlad Tenev and Baiju Bhatt each selling about $50 million worth of stock. Unlike traditional IPOs with a six-month lockup period, Robinhood will allow its employees to sell 15% of its shares immediately after the public debut. Investors will be reportedly able to send another 15% after three months.

Commenting on Robinhood’s public market debut, CEO Tenev stressed that the company was launched with a mission to democratize finance for all. “We built a mobile-first product that didn’t charge commissions or require account minimums. We didn’t build Robinhood for the rich or those with decades of experience,” he noted. Tenev promised that Robinhood will “remain the same” and keep its focus on its customers as the firm moves forward as a public company.

Related: Robinhood introduces a feature aimed at protecting investors from crypto volatility

Launched in 2013, Robinhood became widely known in the cryptocurrency community after the company started offering trading of major cryptocurrencies like Bitcoin (BTC) and Ether (ETH) in February 2018. The company’s crypto-focused division has seen major growth this year with the Q1 performance posting a sixfold increase over the previous quarter.

Despite Robinhood experiencing major growth in 2021, the company has been facing some controversy and increased attention from United States regulators this year over GameStop’s trading suspension in January. In April, Massachusetts’ securities regulators sought to revoke Robinhood’s broker-dealer license, alleging that the firm provided services to the state customers with little or no investment experience.