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Robinhood Shares Rise as Firm Says Early Holders Must Wait to Sell

Robinhood says early holders planning to sell 98 million shares will have to wait until the SEC declares the Resale S-1 Form effective.
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Robinhood Markets  (HOOD) - Get Robinhood Report shares moved up Friday after an SEC filing from the popular brokerage stated that early holders who are planning to sell 98 million shares will have to wait a little while.

Big shareholders filed with the Securities and Exchange Commission Thursday to unload that stock, pushing Robinhood’s share price down 28% to $50.97.

The stock recently traded at $56.24, up 10%. It has oscillated since the company went public at $38. It fell in its first day of trading, July 29, and then rebounded to close at $70.39 Wednesday, before Thursday’s drop.

As for the possible sales of 98 million shares, “No sales can be made off the Resale S-1 until the SEC declares it effective,” Robinhood said in Friday’s filing.

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“And, in light of required SEC staff review periods, Robinhood does not expect that it will be in a position to obtain a declaration of effectiveness until after its financial statements for the period ended June 30, 2021, have been filed with its upcoming Quarterly Report on Form 10-Q, which it expects to file on August 18, 2021.”

TheStreet.com Founder Jim Cramer has lauded the company for revolutionizing investing for the retail investor and has become increasingly positive on the stock.

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"I know, Robinhood isn't of the highest quality. But I endorse it as a stock for what it can become, not what it is now," Cramer wrote in a recent column on Real Money.

Cramer said on Wednesday, however, that investors who bought into the IPO should consider selling some of their position and locking in profit.

TheStreet.com on Friday offered a history of Robinhood.