NEW YORK (AP) — Robinhood made its own leap into the stock market Thursday, the one it helped reshape by bringing millions of new investors to Wall Street, and its shares swung sharply in their first day of trading.
Robinhood Markets’ stock was at $37.57 in early afternoon trading, down 1.1% from its initial price of $38 set late Wednesday. Perhaps fitting for a company that has upended the investing business, it careened from a gain of 5.9% and a loss of 12.2% in the first hour of trading.
It’s a relatively disappointing opening for the highly anticipated offering, which had already priced at the low end of its expected range. The stock could see continued sharp swings through the day given Robinhood’s unusual move to reserve a big chunk of shares for its own smaller-pocketed customers rather than big professional firms.
At its current price, the company is valued at roughly $31 billion, which puts it on par with companies like Kroger and Old Dominion Freight Line, but its heft on the pop-culture landscape may be even weightier. Robinhood has created plenty of passion, both by users and critics alike.
The company has grown explosively since its 2013 founding, with an estimated 22.5 million funded accounts, after it did away with trading fees and made investing easier and even fun to do with its mobile app. More than half its customers are first-time investors, giving them more ability to keep up with the stock-holding, wealthier households that had been pulling away for years.
But Robinhood has also drawn heaps of criticism from users and regulators alike, with a lengthening list of regulatory settlements. Critics say Robinhood encourages unsophisticated investors to make trades too often that may be too risky.
Some users, meanwhile, are still angry at Robinhood after it and other brokers temporarily locked them out of trading GameStop shares earlier this year, when hordes of smaller-pocketed investors were pushing the stock up in part to spite the monied elite on Wall Street.
Now that Robinhood’s stock is trading on the Nasdaq, its performance gives a real-time look at the market’s judgment of Robinhood’s prospects. The company is already delivering the strong growth that Wall Street is always hungry for: Revenue soared 245% last year to $959 million. It then hit $522 million in the first three months of 2021 alone, more than quadrupling from the year-ago level.
But questions remain about whether regulators may tighten oversight of its main money maker. That’s routing its customers’ orders to big Wall Street trading firms, which pay Robinhood to take the other side of the trade.
Beyond that, Robinhood stands to lose if the boom in trading it’s helped create among smaller-pocketed and novice investors fades. That could come if its oftentimes younger customers go back to doing other things than trading on their phones as the pandemic hopefully eases or if users leave for competitors.
Such worries may have dragged Robinhood’s stock down in its early trading, a notable move when stocks traditionally get a pop in their first day.
The relatively low initial pricing for the stock and its early fall were discouraging signs for Sandra Marvel, a 49-year-old investor from Raymore, Missouri, who had been planning on buying shares.
“I completely abandoned my plan,” she said Marvel. “It doesn’t look good. I think there are a lot better trades out there.”
Marvel, who left her job in insurance sales last year to trade stocks full time, has been using Robinhood since 2018.
The company has plans for big growth in the future, continuing its evolution since launching as a stock trading app only for iPhones.
“Over time, we want to be the single money app, the most trusted and most culturally relevant money app worldwide,” CEO Vlad Tenev said in an interview. “So, everything that you use your money for, you should be able to do through Robinhood.”
Among them, he said, were direct deposits of paychecks and paying bills online.
He also pushed back on criticism that Robinhood is making the stock market a casino by encouraging its customers to trade more often.
“I think it’s a big, big mischaracterization because if you look at it, the stock market has been one of the greatest wealth creation tools,” he said. “We should be encouraging access to it and not denigrating people that are able to use it. So in a sense, you’re hearing when wealthier customers are engaging in the stock market, it’s investing. But when the rest of us are accessing the stock market, it’s gambling.”
Robinhood’s stock debut is coming at a very welcoming time. With bonds paying very little in interest, investors are willing to pay much higher prices for stocks than they usually have been through history, and the S&P 500 is close to its record high.
Between 2001 and 2020 the average U.S. IPO returned 14.5% from the offer price on day one, according to Renaissance Capital. So far this year, the jump is even greater, at 34%. For IPOs that have raised at least $100 million, the average first-day return this year is 25%.
Robinhood itself raised nearly $1.9 billion in the deal, which it plans to use to expand and to help pay for expected tax obligations.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
