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Robinhood Stock Jumps, Exceeds IPO Price of $38

Robinhood stock jumped double digits on Tuesday, exceeding its IPO price of $38.
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The online brokerage firm Robinhood Markets  (HOOD) - Get Robinhood Report is finally trading above last Wednesday’s initial public offering price of $38.

Shares of the Menlo Park, Calif., company recently stood at $47.76, up 27% from Monday and up 26% from the IPO.

Until now, Robinhood had been one of the more disappointing IPOs of the year. Some investors are concerned about its reliance on payment from trade-order flow for about half its revenue.

But the company has its fans. Cathie Wood’s ARK Innovation ETF  (ARKK) - Get ARK Innovation ETF Report owns 4.9 million shares, according to Bloomberg.

TheStreet.com’s founder, Jim Cramer, said Robinhood could do a deal similar to Square’s  (SQ) - Get Square, Inc. Class A Report agreement this week to buy Afterpay, the Australian buy-now, pay-later firm.

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“You can't get at these people the way traditional marketers work because many of the customers of these companies simply hate anything traditional in the financial space," he said.

Cramer also explained how the Robinhood app democratized investing for a new generation.

In a Securities and Exchange Commission filing last week, Robinhood said it received inquiries from the Financial Industry Regulatory Authority and the SEC.

The company is facing a probe related to employee trading in so-called momentum stocks before it enacted a trading restriction in January.

"These matters include inquiries related to whether any employee trading in these securities may have occurred in advance of the public announcement of the Early 2021 Trading Restrictions on January 28, 2021," the company stated in its filing.

Robinhood also said that it received an inquiry from Finra regarding the registration status of the CEO of its parent, Vlad Tenev.