Stock trading app Robinhood stands out for its free trading and immense popularity among millennial and Gen Y traders. Because it makes a considerable portion of its trading data publicly available, which third-party sites like Robintrack.net then aggregate, outsiders can track trading data to discern changes in stock popularity that they couldn’t at more traditional brokerages.
Here are some of the biggest movers among Robinhood users over the past week.
Robinhood Investors Have a Kodak Moment
Robinhood traders have been drawn to all things coronavirus, and Eastman Kodak (KODK) is their latest Covid-19 play.
On July 28, it was announced that Kodak had secured a $765 million loan from the federal government to build out manufacturing capacity for coronavirus vaccine ingredients. Kodak plans to use the funds to retool two plants in Rochester, N.Y., and Saint Paul, Minn.
Shares of Kodak took off, bouncing from $2.62 per share to a high of $47.25 within hours of the announcement. Previously, the stock was held in just 9,312 Robinhood accounts, but over 123,000 users added the stock within days of the deal announcement. The total number of Robinhood accounts holding KODK peaked at 132,412—a 1,322% gain in 48 hours.
The SEC has announced a probe into insider trading activity that occurred prior to the Kodak announcement, but Robinhood users remain invested in the stock.
Google Buys Stake in ADT, Robinhood Users Follow
On Aug. 3, Google announced a $450 million strategic investment to acquire a 6.6% stake in home security firm ADT Inc. (ADT). Google plans to integrate its Nest smart home management devices into ADT’s home security product lineup.
Despite privacy concerns surrounding Nest, Robinhood users love all things tech. Alphabet, Google’s parent company, has long been a favorite stock among the platform’s users.
ADT had been trading around $8.60 per share before the announcement and was held in 25,632 Robinhood accounts. After Google announced its new investment in ADT, the stock jolted up to $15.73 per share and was added to more than 23,700 Robinhood accounts, a 92% gain. This brought the total number of accounts holding ADT to 49,360.
The price of ADT did not stay high for long, floating back to $12.77 per share within a day, as day traders booked their gains. Nevertheless, the stock’s popularity among Robinhood account holders has remained elevated.
Robinhood Users Flock To New Electric Carmaker IPO
Chinese electric carmaker Li Auto (LI) made a splash when it went public in the U.S. on July 30, raising $1.1 billion from investors. Within 24 hours, the newly public company rose from 0 Robinhood accounts to a peak of 15,025.
During the same time, shares in Li rallied from the IPO price of $11.50 per share to a high of $16.97—nearly a 50% gain in just a few hours. Shares in Li have fluctuated in a narrow range since the IPO, but the company’s popularity among Robinhood investors has held steady, with 14,180 accounts still holding the stock.
Micro-cap Stocks Earn Brief Moments of Robinhood Popularity
Highly volatile micro-cap stocks have long been a favorite of day traders. These very small companies run from approximately $30 million to $300 million in market capitalization.
With their relatively small capitalization and low number of shares outstanding, micro-cap stocks tend to be highly volatile. This means that even minor developments tend to drive very large moves in the shares of these very small public companies. Another name for micro-cap stocks: day trader delights.
With a market capitalization just shy of $300 million, Adma Biologics (ADMA) only barely counts as a micro-cap stock. Nevertheless, Robinhood traders have learned to love trading highly volatile micro-cap biotech pharmaceutical companies like Adama. Pre-earnings speculation sent shares of ADMA out of obscurity and into the Robinhood limelight.
On July 30 the company announced its Q2 earnings conference call, and in no time the stock rallied from $2.84 per share to $4.04—a gain of over 42% in hours. Before this fairly routine announcement, ADMA was held in 7,207 Robinhood accounts. It has since been added to 10,904 accounts (a 151% gain), bringing the total number of account holders to 18,111. Notably, these movements all occurred before the earnings call even took place on the afternoon of Aug. 5.
Then there’s Medicinova (MNOV), a California-based, micro-cap biopharmaceutical company that is primarily focused on developing new medicines related to neurological, respiratory and liver diseases. Early last week, the company announced a new collaboration with BioComo and Mie University—both based in Japan—to develop a new Covid-19 vaccine.
The day of the announcement, MNOV stock surged from $5.64 to a high of $12.43—a gain of over 120%. At the same time, the stock’s popularity exploded on Robinhood, as it was added to more than 12,700 accounts—a 1,474% increase in the number of accounts that held the stock in just a single day.
Sugar highs like MNOV don’t last, though. Since the announcement, MNOV’s buyers have taken their profits, with shares nearly completing a round-trip to $6.26. While this still represents an 11% gain over the prior share price, it’s 49.6% off the highs. Robinhood traders are slowly getting the message.