The selloff was sparked by a regulatory filing from the company saying that shareholders, including venture capital firm Andreessen Horowitz, will sell up to nearly 98 million shares over time.
It’s been a roller coaster week for Robinhood since its initial public offering last Thursday, which priced at the low end of Robinhood’s intended range and ended its first day of trade 8% lower. But this week Robinhood stock is suddenly garnering huge amounts of interest from retail investors — including WallStreetBets, the army of traders behind the GameStop surge earlier this year.
Shares had risen as much as 82% Wednesday, ultimately closing 50% higher, after gaining 24% on Tuesday.
And even with Thursday’s drop, Robinhood shares have still gained more than 100% since last week.
“Robinhood engineered itself to be a meme stock from the get-go,” said Max Gokhman, head of asset allocation at Pacific Life Fund Advisors. He pointed to how Robinhood took the unusual step of selling a large chunk of its shares to users and opened its road show up to the public.
“When that happens, we should absolutely expect eye-watering price moves on any given day, without any news,” Gokhman said.
–CNN Business’ Matt Egan contributed to this report.
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