Robinhood (HOOD) shares closed 50% higher on Wednesday following two sessions of massive spikes. This week the investment platform's stock has gained 100%, making it the newest meme stock on the Wall Street.
Shares were halted for volatility in the first few minutes of the trading session on Wednesday. The stock soared more than 80% at one point. The upward move comes a day after the stock spiked 24%. The stock price blew past its IPO price of $38 on Tuesday in stark contrast to its public debut last week.
Retail interest could be a contributing factor for the upward move. Robinhood is one of the most mentioned stocks on Reddit's WallStreetBets, according to SwaggyStocks. The stock's comment volume has spiked over the last two days.
On Wednesday Fidelity's real time order data was showing Robinhood as a top traded stock, behind Advanced Micro Devices (AMD) and AMC (AMC), two stocks followed by WSB members.
While short squeezes have often initially driven up "meme" stocks in the past, Robinhood's move is not driven because of a short covering. "While there is some short side activity in HOOD, it is the long side which is main driver of its stock price volatility," Ihor Dusaniwsky of S3 Partners told Yahoo Finance.
"The upward stock price pressure in HOOD is not a short squeeze for the simple reason that there has not been enough time for a large short position in HOOD to be accumulated," he added.
High profile investments in Robinhood may also be driving the price higher. Last week Cathie Wood's Ark Innovation ETF (ARKK) scooped up about 4.9 million shares of Robinhood, according to Bloomberg data.
Investors are keeping a close eye on the stock following Robinhood's public debut last Thursday.
The stock sank as much as 12% below its IPO price during its first day of trading on the Nasdaq. Shares closed down 8% that day. Some questioned whether its lackluster performance had anything to do with Robinhood's hybrid auction-style debut, a lack of lock-up period for 15% of shares held by employees and others, or concerns over regulatory headwinds.
Robinhood has been a key player in the retail trading boom involving GameStop (GME) and other stocks over the past year-and-a-half. In an unusual move, the company allocated about 35% of its shares to retail investors for its IPO.
The options market shows some investors are betting against an upward movement in the stock. Puts expiring August 20th outnumbered calls during the first day of options trading on Robinhood, according to Bloomberg data.
Ines is a markets reporter covering stocks from the floor of the New York Stock Exchange. Follow her on Twitter at @ines_ferre
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