Robinhood shares are jumping in early trading on Wednesday, setting the newly public stock trading app up to extend its 24% rally from the previous session.
Shares of Robinhood popped 13% in premarket trading on Wednesday to around $53.
Robinhood’s stock is making up for its lackluster debut on the Nasdaq last week. The stock priced at $38 per share, the low end of its offering range. It opened at that price on Thursday but then fell 8% on its first day and had largely traded below that price, until Tuesday when it rallied more than 24%.
It is unclear exactly what is driving the stock higher on Wednesday; however, attention from popular investor Cathie Wood typically benefits growth stocks.
ARK Invest’s Wood purchased 89,622 shares of HOOD on Tuesday in ARK Fintech Innovation ETF, a position worth roughly $4.2 million based on Robinhood’s closing price of $46.80. This position adds to the approximately 3.15 million shares Wood has bought of Robinhood since the company’s debut last week.
Robinhood is also garnering attention from retail investors. HOOD is the number one ticker on WallStreetBets tracker Swaggy Stocks, which indicates more than 700 mentions on the Reddit chat room.
“Unpopular opinion: Robinhood still has the best mobile interface,” one post with 4,600 interactions said.
“Its a payment for order flow story with crypto as kind of a kicker,” Stephanie Link, chief investment strategist at Hightower, told CNBC’s “Squawk Box” on Wednesday. “In their second quarter total revenues grew five to ten percent from the first quarter. Well if you look at payment for order flow data, that number actually fell 23% in the second quarter. So it tells me payment for order flow is very competitive but the crypto kicker is probably helping Robinhood and they’re probably gaining share.”
“All that being said, its super expensive. It’s hard to get your hands around the valuation at 11x price-to-sales,” Link added. Online brokerage Charles Schwab is trading at 7x.
HOOD was also a top traded stock on Fidelity on Tuesday.