(Reuters) – Shares of Robinhood Markets Inc tumbled 12% on Thursday, after the owner of the popular trading app warned that the trading frenzy among small-time investors that boosted its second-quarter revenue would slow down in the coming months.
Robinhood, which has been at the center of the “meme stock” phenomenon this year, posted its first results as a public company, offering a glimpse into the growing clout of retail investors.
The company’s stock, itself dubbed the “meme of memes”, has been on a roller-coaster ride since its market debut on July 29, when it closed 8% lower. Since then, the stock more than doubled to $85 through the first week of August, partly due to interest from star investor Cathie Wood.
The shares were down 12% at $43.73 by 5:30 a.m. ET on Thursday and were among the top 15 most traded stocks across U.S. exchanges.
Social media chatrooms were abuzz with activity as users reacted to the company’s warning.
“I wouldn’t buy this. (Too) many red flags. If you made money, good, but this will never go to $80 again,” a Stocktwits user wrote on the trading-focused social media site, tagging Robinhood’s ticker $HOOD.
Message volume related to Robinhood spiked by nearly 36% on Stocktwits, with positive and negative sentiment toward the stock split evenly.
(Reporting by Sruthi Shankar and Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty)