Skip to content

Robinhood warns investors against selling IPO share in first 30 days

Robinhood warns investors against selling IPO share in first 30 days
Jordan Major

Online brokerage platform Robinhood has warned its retail investors against selling their Initial Public Offering shares within 30 days of the offering.

In a note on its website, Robinhood indicated that investors who sell shares under the recently launched IPO access program face the possibility of being restricted from participating in future deals for two months.

However, the company noted that the retail investors are free to sell the shares, but they will bear the consequences. According to Robinhood:

“We won’t prevent you from selling shares you get through the IPO Access program. However, if you sell IPO shares within 30 days of the IPO, it’s considered “flipping” and you’ll be restricted from participating in IPOs for 60 days.”

Notably, Robinhood rival SoFi that runs a similar program, has also initiated punitive measures for investors selling their IPO shares. Currently, SoFi fines investors who sell shares during the first-day boom.

Democratizing investing

In May, Robinhood launched the IPO access initiative as part of democratizing investing. In addition, the platform was launched to cater for all customers with no account limitations.

Through the program, clients can request to buy shares at their initial listing price range. When the final price is set, clients will be able to go through with the purchase, change or cancel.

Medical scrubs manufacturer FIGS Inc was the first company to earn a listing on the IPO Access platform. At the same time, Robinhood is also expected to go public in 2021, reportedly filing papers with the SEC.

The new Robinhood product comes after the platform witnessed significant growth in 2020, attracting young investors amid the coronavirus pandemic. The growth also escalated in 2021 with the emergence of meme stocks like GameStop and AMC.

[robinhood]

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in 70+ cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

Read Next:

Weekly Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Disclaimer: The information on this website is for general informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. This site does not make any financial promotions, and all content is strictly informational. By using this site, you agree to our full disclaimer and terms of use. For more information, please read our complete Global Disclaimer.