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From meme stock promoter to being a meme stock: Robinhood IPO Debut

What a volatile week it has been for the initiator of mainstream trading. Robinhood parked its IPO on 28th July and has been experiencing a volatile time since then – reaching a high of 60.88 and a low of 53.20. Robinhood, the no-fee brokerage firm has been in multiple regulatory compliance news recently. Defying all the pundits, Robinhood entered the market with a bang.

But, is this surge an indicator of investors interest in the firm?

Well, it’s hard to say. Given the company just went public with an implemented lock-in period, there is a relative shortage on the sell side of the equation. Though the driver of the meme stocks frenzy is popular among new trading users, Wall Street is not a fan of Robinhood. It would be interesting to watch how the equation play in the coming days.

Chart of the Week – Nifty PE vs Nifty: Stocks becoming cheaper?

Though Nifty is on the rise, the recent trend in the PE ratio indicates that the stocks are becoming cheaper. P/E ratio has been used as an indicator of under/overvaluation – in simple words, it’s the market value of the company divided by its earnings.

Innovation In Focus

  1. Facebook to launch Facebook Movies to target exclusive ads revenue through Netflix.
  2. iPhones to scan for images of child sexual abuse.

Global Market Update

Global Equity Market

S&P closed another month with green – history continues. Fueled by falling record low unemployment numbers, the growth continues.

It would be interesting to watch how Aug would play in. Given the bad RED history of August and much-anticipated market correction, it would be interesting to watch how the equation plays in the coming month.

Companies In Focus

  1. Levi’s has agreed to acquire Beyond Yoga, a Los Angeles-based yoga and fitness apparel company, for an undisclosed sum.
  1. Sanofi, the French drugmaker, will buy its mRNA development partner Translate Bio for $3.2 billion. Sanofi will pay $38 per share in cash, 30% above yesterday’s closing price. Bloomberg has more here.
  1. BharatPE, an Indian fintech startup, has raised $370 million in a Series E led by Tiger Global, with Dragoneer Investor Group and Steadfast Capital participating.

Thanks for Reading!

Shubham Agarwal (CFA L2 Candidate | Incoming MBA candidate at University of Cambridge, UK)

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