Source: Wall Street

Early Friday Eastern time, Internet celebrity Internet brokerage Robinhood said that the early major shareholder sale needs to wait for the approval of the Securities and Exchange Commission (SEC) before it can be carried out and will not begin immediately. That allayed fears of a massive sell-off. At one point in intraday trading on Friday, Robinhood soared more than 19% to more than $60. The increase has narrowed since then.

Early Friday Eastern time, Internet celebrity Internet brokerage Robinhood said that the early major shareholder sale needs to wait for the approval of the Securities and Exchange Commission (SEC) before it can be carried out and will not begin immediately. That allayed fears of a massive sell-off. At one point in intraday trading on Friday, Robinhood soared more than 19% to more than $60. The increase has narrowed since then.

Robinhood reiterated that it did not sell any additional shares but submitted a sale form on behalf of certain shareholders on behalf of certain shareholders under pre-existing contracts. Robinhood clarified that these sales would not begin immediately. The sale will have to wait for SEC's approval, which will not happen until after Robinhood's second-quarter results on Aug. 18.

Early major shareholders involved in the company's convertible bond sale in February applied to sell a total of nearly 97.9 million Class A common shares of the company, and the proceeds will go to the shareholders, according to documents filed by Robinhood to SEC on Thursday. In February, Robinhood had to sell $3.55 billion of convertible bonds to raise capital in the face of a potential massive margin call after a surge in the hot holding stocks of retail short-selling institutions. At that time, the first investors who bought convertible bonds were allowed to sell half of their holdings, and the remaining 50% would be lifted on August 25, about three weeks later.

CNBC quoted Rainmaker Securities as saying that early investors in Robinhood could buy the company's shares at a 30 per cent discount to the IPO price, meaning their purchase price was $26.60. Emergency financing usually provides a great deal of protection to investors. Such a clause exists when you need $3 billion in 48 hours.

On Thursday, the news sent Robinhood down more than 28% on the day, forcing $50 into integer digits. It closed down 27.6% at $50.97 on Thursday, close to its intraday low and basically giving up all its gains since Tuesday.

Robinhood shares have been "bumpy" since IPO went public last week. Given its popularity among millennials investors, Robinhood's US IPO, which should be popular among retail investors, priced at $38, was set at the bottom of the guidance range, closed down more than 8 per cent on its first day of trading and was embarrassed to break.

But that has changed this week. On Tuesday and Wednesday, Robinhood soared for the second day in a row, boosted by bullish sentiment among retail investors. Among them, it closed up more than 24% on Tuesday and more than 50% on Wednesday, and the intraday high, which rose 82% to $85, repeatedly triggered the circuit breaker, and the company's market capitalization rose to as high as $65 billion. Wednesday's closing price was double IPO's first-day closing price.

Since the listing of Robinhood, "bull market queen wooden sister" Cathie Wood has been buying all the way, and as of Thursday, its three ETF owned more than 6.5 million shares of the stock.

However, many analysts have called for calm, brokerage Wolfe research advised investors "do not 'YOLO'": "We can not sincerely advise investors to participate in Robinhood trading in either direction." Wolfe Research gave Robinhood a "hold" rating and a target price of $45.