A week after going public, the online trading company is off to a volatile start.
Robinhoodshares fell 28% to $50.97 on Aug. 5 after a brief rally earlier in the week.
Robinhood also offerscryptocurrency tradingand cash management accounts.
The company’s stated mission is to “democratize finance for all.”
The company’s revenue grew to $959 million in 2020, a 245% increase year-over-year.
Its first-quarter earnings were $522 million, a 309% increase year-over-year.
Amid its growth, Robinhood has been swept into controversy.
But controversy has swirled since Robinhood’s founding.
Robinhood was specifically named in the suicide note.
Serious investors inspect a company’s financial statements to understand its business model, opportunities and vulnerabilities.
At the beginning of an S-1 statement, you’ll find a prospectus and summary that provide information.
Here are a few things to scrutinize as you consider any investment.
How long has the company been in business?
In 2019,Goldman Sachsanalyzed 4,481 IPOs over 25 years to determine the critical factors to a successful IPO.
Who runs the show?
Company management plays a crucial role in overall operation and strategy.
Have they ever managed a publicly traded company?
What’s their track record of success, and how does it compare with the company’s stated values?
Robinhood’s executive team isprofiled here.
What’s the market landscape?
What’s the plan for growth and profitability?
After linking their bank account, new customers also receive a $500 stock credit.
Whether the company plans align with practice depends on the numbers.
Who are the competitors?
You don’t have to buy as soon as an IPO hits the market.
Consider a wait-and-watch strategy and buy when the stock dips to maximize your initial earnings.
ETFs are a collection of investments that can include stocks, bonds and commodities.
Their diversification comes with less risk than playing the odds with a single stock.
