Robinhood extends 2-day gain to 126% as it becomes the most talked-about stock on Reddit’s Wall Street Bets forum

Reddit Wall Street Bets Retail Trading GameStop
  • Shares of Robinhood soared as much as 82% on Wednesday, extending its two-day gain to 126%.
  • The move higher comes as Robinhood takes the spot as the most mentioned stock on Reddit’s Wall Street Bets forum.
  • Robinhood went public at $38 per share last week, and hit a high of $85 on Wednesday.
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Shares of Robinhood surged as much as 82% in Wednesday trades, extending its two-day gain to 126%.

The move higher in Robinhood came after the online trading app stumbled in its post-IPO trades last week, with the stock falling as much as 12% on its first day of trading. Robinhood priced its IPO at $38 per share on Thursday. The stock hit a high of $85 on Wednesday amid numerous trading halts for volatility.

The move higher in Robinhood comes as retail investors talk more about the stock on Reddit’s Wall Street Bets forum. According to data from SwaggyStocks, Robinhood was by far the most mentioned stock on the forum over the past 24 hours, with more than 1,700 mentions. The next most talked about stock was AMD with only 388 mentions on the forum.

A majority of Robinhood’s mentions on the Wall Street Bets forum were positive, according to SwaggyStocks. “Unpopular opinion: Robinhood still has the best mobile interface,” one Reddit user said.

Others were less positive on Robinhood, with one user speculating that the stock “will eventually tank” if payment for order flow is banned by the SEC. Robinhood derives a bulk of its revenue from PFOF practices.

But some investors are not concerned about Robinhood’s source of revenues, including Cathie Wood’s ARK Invest, which has built a more than $250 million stake in the online trading app across three of its ETFs.

Read more: Top 12 meme stocks this week on Reddit: AMD and Tesla steal the show after blowout earnings reports while Square shakes up the fintech space with a bold acquisition

Robinhood stock chart
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Retail purchases of Moderna and Pfizer stock hit an 8-month high as Delta infections accelerate

Moderna vaccine
A person in Boston receives the Moderna COVID-19 vaccine.

  • Retail investors have bought the highest amounts of stock in Moderna and Pfizer in 8 months, Vanda Research said Wednesday.
  • Individuals have purchased a combined $180 million in shares as COVID-19 vaccine cases continue to rise.
  • Moderna’s stock has jumped in value since mid-July with its inclusion into the S&P 500 index.
  • See more stories on Insider’s business page.

Individual investors have bought more stock in Moderna and Pfizer in recent sessions than they have since late last year, spurred in part by the increasing spread of the Delta strain of coronavirus, figures released by Vanda Research on Wednesday showed.

Combined net inflows into the stocks reached $180 million over the last 10 days, the largest amount since each company unveiled positive COVID-19 vaccine trial results in November, led by Pfizer’s announcement on November 9.

Moderna shares have jumped by 20% through Tuesday from July 21, when the biotech firm joined the benchmark S&P 500 index in acknowledgment of the stock’s growth since its vaccine announcement. Meanwhile, Pfizer shares since last week have climbed by more than 9%, trading around all-time highs above $45, after the company increased its 2021 guidance for COVID vaccine sales.

“The rise in global cases of the delta variant, the imminent FDA approval and the rise in vaccine prices have all coalesced to turbocharge the rally,” said Vanda.

The Financial Times this week reported that Pfizer and Moderna have raised the prices of their COVID vaccines in their latest supply contracts with the European Union. Higher prices would come at a time of increasing coronavirus infections worldwide led by the highly transmissible Delta variant. Delta is the dominant strain in the US and the country is reporting more than 75,000 COVID cases a day, higher than a low point of roughly 11,000 cases a day six weeks ago, according to the Washington Post.

Meanwhile, the Food and Drug Administration has accelerated its timetable to fully approve the coronavirus vaccine from Pfizer and its partner, BioNTech, with the aim of finishing the process by the start of next month, The New York Times reported Tuesday. Moderna, whose vaccine is the second most widely used in the US, is still submitting data following its June filing for final approval, the report said.

Stock in Moderna and Pfizer were standouts during a summer lull in US equity purchases by retail investors which have dropped to their lowest level since May, said Vanda.

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Robinhood soars 29% to post-IPO high as investors like Cathie Wood’s ARK Invest build positions

Robinhood logo stocks investing
  • Robinhood soared as much as 29% on Tuesday to a post-IPO record of $48.59.
  • The online trading app is seeing buying interest from long-term investors like Cathie Wood’s Ark Invest.
  • Ark Invest has built a stake in Robinhood worth about $250 million since the company went public last week.
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Shares of Robinhood soared as much as 29% on Tuesday to a post-IPO record high of $48.59 as long-term investors like Cathie Wood’s Ark Invest begin to build a position in the fintech platform.

Robinhood experienced a choppy debut last week, with shares falling as much as 12% from its IPO price of $38 per share. The IPO was unique in that Robinhood allocated shares to its user base, allowing retail investors to get in on the ground level. That access is typically reserved for institutional investors and their clients.

While only 1% of Robinhood’s user base participated directly in its IPO, other investors appear more bullish on the long-term prospects of the online trading app.

Ark Invest has built a near-$250 million stake in Robinhood since it went public last week. Across Ark Invest’s Disruptive Innovation, Next Generation Internet, and Fintech Innovation ETFs, the firm owns more than 6 million shares of Robinhood.

But not all are bullish on Robinhood, with David Trainer of New Constructs arguing that Robinhood is worth no more than $9 billion, representing downside potential of more than 75% from current levels.

“The mounting regulatory risk Robinhood faces makes us concerned that the public may see Robinhood’s stated goal to ‘democratize investing’ as a ruse to lure them into speculative trading and gambling that benefits Robinhood more than the individual investor,” Trainer said in a report last month.

Robinhood stock chart
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US stock futures rise with earnings in view, as investors grapple with economic growth and Delta variant concerns

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  • US stock futures gained Tuesday, as investors looked for the robust 2Q earnings season to roll on.
  • Investors weighed concerns the spread of the Delta coronavirus variant and its potential impact on economic growth.
  • Criticism of Tencent in China dragged the stock down and raised fears of further regulatory pressure.
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US stock futures gained on Tuesday as investors weighed healthy second-quarter earnings reports against concerns about the spread of the COVID Delta variant and its impact on economic growth.

Markets pointed to a return to strength at the open, with S&P 500 futures up 0.37%, Dow Jones futures 0.49% higher, and Nasdaq futures rising 0.14%, at last check at 6:39 am E.T.

Investors appeared to be boosted by a string of robust corporate earnings and the positive progress made by the Biden administration’s infrastructure bill. A fresh slate of quarterly financial updates lies ahead Tuesday, with Eli Lilly, Fiat Chrysler, BMW and Marriott on the docket.

Concerns about the fast spread of the Delta variant in the US and China were rising, as investors assessed the potential for a slowdown in global economic growth associated with higher COVID-19 cases and more lockdowns.

“With a number of US states reinstating mask mandates and tightening restrictions, the optimism of a few weeks ago is now being replaced by doubts as to how resilient the recovery we’ve seen so far this year can remain, as we head into the autumn and the weather starts to get colder,” Michael Hewson, chief market analyst at CMC Markets, commented.

Key Asian equity markets closed lower Tuesday as an increase in COVID cases led to renewed or extended restrictions in the region. Tokyo’s Nikkei 225 lost 0.5%, and the Shanghai Composite declined 0.47%.

Fears about renewed regulatory pressure in China hit markets on Tuesday after a Chinese state-run media outlet described online gaming was “spiritual opium” and “electronic drugs” on Tuesday, prompting fears that Beijing may go after online entertainment providers in another crackdown. The stock price of entertainment heavyweight Tencent fell as much as 10%.

“After the last few weeks, even oblique warnings from authorities are ignored at your peril, and it seems that regulatory risk is alive and well in China still,” Jeffrey Halley, senior market analyst at OANDA, said.

European markets started the session higher, building on Monday’s gains built on upbeat manufacturing and other economic data. Frankfurt’s DAX was up 0.14%, London’s FTSE 100 gained 0.34% and the Euro Stoxx 50 inched 0.16% higher.

The yield on the US 10-year Treasury note rose to 1.199%, up 2.7 basis points. Bonds rallied and yield dropped in the previous session after US manufacturing data came in weaker than expected. Investors are watching for signs of a pullback in economic growth that might shift the Federal Reserve’s view of when and whether to taper its asset purchases.

Oil prices edged higher, recovering from losses prompted by demand concerns linked to COVID-19 restrictions. Brent crude was up 0.48% at $73.24 per barrel, while WTI crude gained 0.46% at $71.59 per barrel.

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Square jumps 10% after it agrees to $29 billion acquisition of buy now, pay later firm Afterpay

Jack Dorsey wearing tie-dye shirt onstage
Twitter CEO Jack Dorsey on stage at the Bitcoin 2021 Convention, a crypto-currency conference in Miami.

  • Shares of Square jumped as much as 10% on Monday after the fintech agreed to acquire Afterpay for $29 billion.
  • Afterpay is a “buy now, pay later” firm that consumers use to pay for products in installments with 0% interest.
  • Square will fund the $29 billion acquisition of Afterpay with all stock.
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Square jumped as much as 10% on Monday after it agreed to acquire Australian-based Afterpay for $29 billion in an all-stock deal. Shares were initially lower by about 5% in pre-market trades.

The deal will enable Square to add the “buy now, pay later” payment option to its Cash app payments platform, directly competing with companies like Affirm. The “buy now, pay later” payment option has been on the rise in recent years, as it allows consumers to more flexibly pay for pricey items with 0% interest and no hard credit checks.

Afterpay shareholders will receive 0.375 shares of Square for each ordinary share of Afterpay, representing a 31% premium to the company’s closing price on Friday. Square plans to integrate the payment option platform into both its Cash App and Seller platform, allowing businesses of all sizes to easily enable the buying option for their suite of products.

“Square and Afterpay have a shared purpose. We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles,” Square CEO Jack Dorsey said.

Square believes the deal will be accretive to gross profit growth with a decrease in adjusted EBITDA margins in the first year after the merger. Afterpay serves more than 16 million consumers and nearly 100,000 merchants globally.

After the deal closes, Afterpay shareholders are expected to own about 18.5% of the combined company on a fully diluted basis.

Square isn’t the only fintech company with its eyes on the growing “buy now, pay later” market. Following the success of Affirm, PayPal built its own BNPL payment option, and Apple is developing the payment option with Goldman Sachs, according to a Bloomberg report.

The deal is expected to close in the first quarter of 2022.

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US stocks gain as 2nd-quarter earnings continue to impress investors

trader, NYSE

US stocks gained on Monday as investors continue to be impressed by second-quarter earnings results, with profit growth among S&P 500 companies seeing its fastest rise since 2009.

With more than half of S&P 500 companies having reported earnings, 88% have beaten analyst revenue and profit estimates, according to data compiled by FactSet.

The strong earnings beats has led to analysts increasing their earnings estimates for the third quarter, as consumers continue to propel the economy higher in the ongoing post-pandemic recovery.

Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Monday:

Square fell as much as 5% on Monday after the fintech platform agreed to acquire “buy now, pay later” firm Afterpay for $29 billion in an all-stock deal.

HSBC released earnings results that surpassed profit estimates. The bank lowered its loan loss provisions as the economy continues to stage its recovery from COVID-19.

Oil prices were lower. West Texas Intermediate crude was down as much as 1%, to $73.21 per barrel. Brent crude, oil’s international benchmark, fell 0.9%, to $74.73 per barrel.

Gold fell 0.36%, to $1,810.70 per ounce.

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US stocks slip as weak Amazon sales outlook highlights growth challenges for tech giants

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US stocks closed lower on the last trading day of the month, as a weak sales forecast from Amazon clouds the outlook for technology stocks.

After the close on Thursday, Amazon reported quarterly earnings that fell short of expectations, with the company missing quarterly sales estimates for the first time since 2018. Its sales and profit forecasts were below expectations, stoking concern among investors.

Shares of the e-commerce giant took their biggest tumble since May 2020, falling by as much as 8%. This translated to a loss of around $148 billion to Amazon’s market value.

Tech giants have been some of the pandemic’s biggest winners. However, Amazon’s latest report underscores the challenge of keeping the strong pace of sales as the economy reopens.

“While outlook was disappointing, and bears could argue Amazon is investing in 1-Day fulfillment out of competitive necessity, we think Amazon remains in a solid position, with US retail growth likely above industry growth rates,” Bank of America analysts Justin Post and Michael McGovern said in a Friday note.

Here’s where US indexes stood shortly after the 4:00 p.m. ET close on Friday:

Pinterest shares tumbled by 19% to a two-month low after the company reported a quarterly loss in active users on the social media site as easing of COVID-19 restrictions led more people to engage in other activities.

US stocks in recent weeks have climbed mostly higher as investors cheered robust corporate earnings and the accelerating pace of global economic recovery. The COVID-19 Delta variant, along with inflationary concerns, has dampened positive sentiment.

The S&P 500 still managed to close out its sixth straight month of gains.

The yield on the 10-year Treasury note was 1.231%, down by 3.8 basis points.

The Personal Consumption Expenditures price index – a closely monitored measure of nationwide inflation – gained 0.5% last month, suggesting that prices continued to climb amid supply chain issues across the US.

The reading exceeded the median estimate of a 0.4% increase from economists surveyed by Bloomberg. It also matched the May print of 0.5% growth.

Oil prices were up. West Texas Intermediate crude rose 0.41%, to $73.92 per barrel. Brent crude, oil’s international benchmark, increased 0.37%, to $76.33 per barrel.

Gold slipped 0.93% to $1,813.49 per ounce.

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‘Rinse, lather, buy the dip’: Here’s how 3 Wall Street analysts are reacting to Amazon’s 2nd-quarter earnings

Amazon Fresh UK store
Amazon Fresh UK store

  • Amazon’s mixed second quarter earnings results led to a more than 7% decline in the stock on Friday.
  • The company reported $113 billion in revenue, missing analyst estimates by about $2 billion.
  • Here’s how 3 Wall Street analysts reacted to Amazon’s second quarter earnings report.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares of Amazon fell more than 7% on Friday after the e-commerce giant released second quarter earnings results that beat profit estimates but missed revenue estimates.

Friday’s decline represented Amazon’s worst day since the onset of the COVID-19 pandemic in March of 2020, but Wall Street analysts remain bullish on the company’s long-term growth prospects.

Amazon reported second-quarter revenue of $113.1 billion and earnings per share of $15.12, missing analyst estimates of $115.1 billion and beating estimates of $12.32, respectively.

The company said it expects revenue of $106 billion to $112 billion in the third quarter, which would represent year-over-year growth of 10% to 16%. Still, that’s well below analyst estimates of $118.7 billion in third-quarter revenue. Amazon gave a wide third quarter guidance range for profits, guiding for $2.5 billion to $6.0 billion in operating income.

As investors navigate Amazon’s results, here’s how three Wall Street analysts reacted to the second quarter earnings report.

Stifel: “Rinse, lather, buy the dip.”

“While Amazon missed overall topline numbers, the shortfall was primarily concentrated in Online Stores which includes first party sales (the lowest multiple business line). The higher margin AWS, advertising, subscription and 3P business lines outperformed our expectations, with AWS growth accelerating sequentially,” Stifel said in a note on Thursday.

The firm said the current sell-off makes for an attractive setup “now that shares are on the other side of the COVID comp reset,” according to the note.

Stifel reiterated its Buy rating and $4,400 price target, and advised investors to take advantage of the 7% sell-off.

JPMorgan: “AWS & Advertising were bright spots in an otherwise tough quarter.”

“While street estimates will come down, Amazon is still running at a 2-year compound annual growth rate of 25% to 30%, which is above its pre-pandemic growth rate of ~20%,” JPMorgan said in a note on Thursday.

The bank noted that the weaker-than-expected earnings results were driven by higher labor costs, less operating leverage on slower volume growth, and marketing costs returning to more normalized levels.

“Amazon is still catching up with strong multi-year demand and 2021 is shaping up to be another big fulfillment build-out period on the heels of 50% square footage growth in 2020. Slower growth and increased investments make the shares more challenging near-term, but we expect revenue growth to normalize more around 20% next year and Amazon’s investments in fulfillment and logistics bode well for future growth,” JPMorgan said.

JPMorgan reiterated its Overweight rating and lowered its price target to $4,100 from $4,600.

Bank of America: “Reopening pressuring sales, but just a blip in long-term penetration trend.”

“While outlook was disappointing, and bears could argue Amazon is investing in 1-day fulfillment out of competitive necessity, we think Amazon remains in a solid position, with US retail growth likely above industry growth rates (indicating continued share gains). We still think the stock set up could benefit after 4Q guidance is provided (potentially removing an overhang), when Street can likely start looking forward to more normal growth comps in 2022,” BofA said.

Bank of America reiterated its Buy rating and lowered its price target to $4,250 from $4,300.

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3 reasons why the stock market could enter risk-on mode in August after a couple choppy months, according to Fundstrat’s Tom Lee

Tom Lee
  • The stock market is primed to enter risk-on mode in August following a sideways summer chop, Fundstrat’s Tom Lee said in a note on Friday.
  • Lee pointed to an imminent peak in Delta-variant cases and surging bitcoin prices as reasons to expect upside in stocks next month.
  • These are the 3 reasons stocks are primed to move higher in August, according to Fundstrat.
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After weeks of a sideways “chop” in certain stock sectors, August could be the month risk-on mode returns for the market, Fundstrat’s Tom Lee said in a note on Friday.

Lee highlighted that since early June, epicenter stocks collapsed while a handful of names in the technology sector moved higher and propped up broad market indices. The steep drop in financial, energy, and hotel/cruise stocks came amid a surge in COVID-19 cases caused by the delta variant.

Historically, not much money has been made in stocks in the month of August, especially when markets delivered strong gains in the first half of the year.

“August is not generally a great month for stocks. The win-ratio is low at 54% overall,” Lee said, citing an analysis of data going back to 1928. And when the S&P 500 is up more than 13% in the first half of the year, August returns average -0.50%, according to the analysis.

But these 3 reasons suggest to Lee that the stock market can buck its historical trend and enter risk-on mode.

1. “Seasonal analysis suggests USA Delta spike could end in next 10-12 days, or sooner.”

Lee highlighted that low vaccinated areas are seeing far worse seasonality in COVID-19 spread than higher vaccinated areas. An analysis of COVID-19 in the 5 largest counties in Florida suggest that a peak could be right around the corner, within the next week or two, according to Fundstrat.

“Florida has been among the worst USA Delta outbreaks. Thus, this is a positive inflection, if the cases turn down next week,” Lee said.

2. “Pfizer just released data showing 3rd shot significantly boosts delta antibody response by 5x.”

Data from Pfizer suggests that a third dose of its COVID-19 vaccine leads to a 100-fold increase in Delta neutralizing antibodies relative to a non-vaccinated person,, and a 5-fold increase relative to the second dose, Lee highlighted.

“The case for boosters is very high and is a sound policy strategy,” Lee said, while acknowledging the main challenge is convincing about a third of the US that has yet to be vaccinated to get their shots.

“But this should not change the fact that the Delta risk to the US is strongly diminished. And thus, we are seeing positive tilt on the Delta variant risk,” Lee explained.

3. “Bitcoin, the global non-US ‘risk-on’ proxy is pushing above $40,000 = risk on!”

Bitcoin is set to post its first positive monthly gain in four months, and its best week since February, as the cryptocurrency rallied more than 30% from $30,000 to $40,000. And Lee still expects bitcoin to close above $100,000 in 2021, representing potential upside of 163% from current levels.

“Bitcoin is the risk-on asset for emerging market investors, more than equities. Risk appetite seems to be returning in the past week,” Lee said, adding that the rally is occurring as a lot of bad news is priced in following China’s crackdown.

“So for now, we are upgrading our baseline expectations for August. Instead of ‘chop’, it’s ‘upside bias,” Lee concluded.

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Retail investors bought $18.9 million in Robinhood shares during its IPO debut, less than other high-profile launches, data shows

A graph shows how much money retail investors purchased in companies in the first day of trading.
Snap tops a list of net retail purchases on 1st trading days.

  • Individual investors bought $18.85 million in shares of Robinhood during the trading app’s debut on Thursday, Vanda Research said.
  • That’s lower than other major IPO debuts, including this year’s launch of Coinbase.
  • Robinhood ended its first trading session down by 8.4% and has continued its slide on Friday.
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Retail investors bought $18.85 million of Robinhood stock during the trading app’s first day in the public market, lower than other major IPO debuts, according to Vanda Research data released Friday.

Retail investors poured more money into this year’s launches of crypto exchange Coinbase and Chinese ride-hailing app Didi Global. In April, $57.4 million in Coinbase stock was purchased, and in June, that group picked up $69.8 million in Didi stock, said Vanda, whose VandaTrack arm watches activity in 9,000 individual stocks and ETFs in the US.

The $19.7 million of DoorDash shares purchased in the food delivery company’s December 2020 debut was just ahead of retail purchases of Robinhood stock.

Robinhood shares had a rough first session on Thursday, dropping 8.4% to end at $34.82 after being whipsawed. The IPO price of $38 was at the low end of its targeted range of $38 to $42 per share.

Social media app Snap tops the list at $143 million in shares purchased by retail investors, said Vanda. Snap went public in March 2017. Uber was right behind that, at $139.9 million in May 2019 for the ride-hailing app.

Robinhood bucked convention in its IPO by setting aside 35% of its shares for individual investors. The company earlier this year angered many of its customers when it halted buying of GameStop, AMC Entertainment and other meme stocks during a massive rally. Robinhood had pledged to earn back the trust of those customers. The company has more than 18 million accounts and 17.7 million active monthly users.

Among institutional investors, Cathie Wood’s ARK Innovation ETF exchange-traded fund bought nearly 1.3 million shares of Robinhood on Thursday, according to a daily trading report from Ark Investment Management. That logs a $45 million stake in Robinhood at the company’s closing price.

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