Shares of stock trading app Robinhood jumped by 24% on Tuesday—putting the stock well above its IPO price of $38 per share last week—and adding around $600 million each to the net worths of the company’s two billionaire cofounders.
Based on a $46.80 closing price, Robinhood cofounders Vlad Tenev, 34, and Baiju Bhatt, 36, are now worth $2.9 billion and $3.3 billion, respectively, according to Forbes’ calculations. Tuesday’s stock surge added $557 million and $627 million, respectively, to Tenev and Bhatt’s net worths.
Robinhood went public on the Nasdaq last Thursday under the ticker “HOOD,” in a lackluster IPO where shares fell by 8% on the first day of trading.
The stock had largely continued to trade below its starting IPO price of $38 per share—until Tuesday, when shares surged 24%, thanks to growing interest from both retail investors and Wall Street. Robinhood was a “top traded stock” among customers on brokerage giant Fidelity and was also a trending topic on forums like Reddit’s WallStreetBets on Tuesday.
While many analysts and traders have been carefully watching the stock, some Wall Street veterans have recently given it a vote of confidence. Influential hedge fund manager Cathie Wood of ARK Invest, for example, recently added 1.85 million shares to her position in Robinhood. In total, her firm now owns around 3.15 million shares, worth nearly $150 million by Tuesday’s close.
Wood, whose ARK Invest manages some $60 billion in assets, has a net worth of $400 million, according to Forbes’ estimates.
Another likely reason behind the stock’s rally: CNBC host Jim Cramer gave Robinhood his blessing in a segment on Monday night, highlighting the online brokerage’s potential to mobilize its 22 million users and branch out into other forms of finance.
Robinhood had a $29 billion market capitalization after going public last week—a rich multiple of 30 times the company’s $959 million in 2020 revenues. After Tuesday’s stock surge, markets now value the company at $39 billion.
Tenev and Bhatt launched the business in 2013 with their often repeated mission to “democratize finance for all” after meeting as undergraduates at Stanford University. They each own around 8% of the company, according to filings.