Technology

Why Some of Reddit's Meme Stock Traders Refuse to Buy Robinhood Stock: CNBC After Hours

CNBC.com's Pippa Stevens brings you the day's top business news headlines. On today's show, CNBC's Kate Rooney explains why some meme stock traders are avoiding Robinhood's IPO. Plus, Nikola founder Trevor Milton is indicted on fraud charges.

Robinhood falls in its public market debut, closes more than 8% lower at $34.82 per share

Shares of Robinhood closed down more than 8% in its Nasdaq debut, after pricing near the low end of its IPO range.

The online brokerage started trading at $38 per share, the low end of its range, valuing the company at roughly $32 billion. After dropping as much as 10% and ending the session at $34.82, Robinhood's market capitalization was about $29 billion.

Trading for the first time under the ticker HOOD, the online brokerage hit the public markets it seeks to democratize for amateur investors.

Robinhood, whose stock trading app has surged in popularity among retail investors, sold shares in its IPO at $38 a piece on Wednesday evening. Robinhood is valued at 10.5 times forward EBITDA.

Amazon posts third $100 billion quarter in a row, but still misses expectations

Amazon's revenue grew by 27% year over year to $113.08 billion. That's a significant slowdown from the second quarter of 2020, when sales skyrocketed 41% year over year.

On a call with reporters, Amazon CFO Brian Olsavsky blamed tough year-over-year comparisons to its business during Covid-19 lockdowns. In mid-May of last year, Amazon saw growth rates jump to between 35% to 45%, he said.

"We're starting to lap that and that's why you see some of the growth rate coming down," Olsavsky said, adding that Amazon expects to see slower growth continue for the next few quarters.

For the third quarter, Amazon said it expects to book sales between $106 billion and $112 billion, representing growth of 10% to 16% compared to the same period last year. That's well below consensus estimates of $119.2 billion.

Nikola founder Trevor Milton pleads not guilty to fraud charges, released on $100 million bail

Nikola founder Trevor Milton pled not guilty to fraud charges in a Manhattan courtroom Thursday afternoon after federal prosecutors accused him of misleading investors about the capabilities and technologies of the electric vehicle start-up.

Milton, who resigned as chairman in September, was freed on a $100 million bond secured against two of his Utah properties valued at $40 million. He is barred from contacting investors and was issued travel restrictions by the court. It was his first major appearance since resigning from the company and deleting his social media accounts.

A federal grand jury charged Milton with three counts of criminal fraud for lying about "nearly all aspects of the business" to bolster stock sales of the electric vehicle start-up, according to an indictment unsealed Thursday.

Copyright CNBCs - CNBC
Contact Us