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BTC Bulls & Bears Ready Up, Robinhood Drops 8% at Market Close from IPO Offering

Alpaca Team
Alpaca Team
Keeping Up with the Market - Jul 30, 2021

We’re excited to introduce a new weekly market recap where we will highlight several market moving topics. We will summarize market moving events weekly.

Here Come the Bulls and Bears of Bitcoin

Bitcoin continues to trade around the all important technical level of $40,000.  A lot of BTC bulls see BTC going to $44,000 or $48,000 if BTC can break above $40,000.  BTC bears want to see if BTC will break the support around the $30,000/$29,000 level. Some near term non technical catalysts are new regulations and mass adoption.  Expect to see BTC trade down on new regulations and BTC catch a bid if we have any news on mass adoption of bitcoin by any large companies (I’m talking about you AMZN!) or governments.

Robin Hood IPO on Thursday, July 29

In one of the most highly anticipated Initial Public Offerings of 2021 Robin Hood started trading Thursday on the Nasdaq. The Public Offering Price (POP) of the IPO priced at the lower range of guidance at $38 a share.

What makes the Robinhood IPO unique is that Robinhood is reserving many shares of the offering for its own clients. Robinhood will set aside 20% to 35% of shares in the offering for retail account holders at Robinhood.  

CEO Vlad Tenev has been quoted as saying “this (IPO) will be one of the largest retail allocations ever.”  Robinhood has been a pioneer in the retail brokerage industry and has led the way in lowering transaction costs for retail investors. Robinhood trades on Nasdaq under the symbol “HOOD”.  Thursday HOOD closed at 34.82, down 8.37% from the Public Offering Price.  

DIDI Global (DIDI) down 50% from IPO Offering Price of $14

Speaking of IPOs, DIDI Global (DIDI) went public on June 30th at $14 a share. DIDI traded down to a low $7.16 on July 26th, nearly 50% off of its Public Offering Price.  DIDI is caught up between a crackdown of Chinese Regulators on overseas listings (outside of China) and questions around the way the company collected data on its users.  DIDI traded up 40% on Thursday morning on a report that the company would be taken private only to trade back down after the company denied the report later in the morning.  

China and Hong Kong Experience Equity Volatility

Shares of Chinese based companies are seeing increased volatility around the globe.  For example, the CSI 300 was down over 3% in local sessions on July 26th and July 27th only to bounce back up 1.9% on July 29th.  The CSI 300 is an index of 300 A share listed stocks on the Shanghai or Shenzhen Exchanges.  If you are looking for exposure to these securities in mainland China one ETF you may want to consider ASHR.  

The same volatility follows Hong Kong listed Chinese equities. The Hang Seng index was down over 4% in local sessions on July 26th and July 27th.  On July 29th the index bounced back and closed up over 3%.  If you are looking for large cap exposure to Hong Kong listed equities you can gain exposure by using the ETF FXI.  

ASHR and FXI both have listings on the NYSE Arca.

US Dollar Trading at Multi-Week Lows

Federal Reserve Equity Investors were relieved that a rate hike isn’t in the Fed’s plans anytime soon causing the dollar to trade down to multi-week lows.  Investors will no doubt pay attention to Jerome Powell’s speech during the annual Jackson Hole conference of central bankers towards the end of next month.  

About the Writer

My name is Allen Spence and I have been working in the retail brokerage industry for over 16 years.  I joined Alpaca in March of 2021 as a Brokerage Operations Consultant. Before joining Alpaca I have worked in a retail branch environment, call center for active traders, and spent over seven and a half years as the team lead on an equity trading desk for a large regional broker dealer.  I’m excited to be at Alpaca helping bring the markets to investors worldwide. I live in Florida and enjoy traveling and spending time with my family.  

About Alpaca

Alpaca is a globally distributed financial technology company that is democratizing global access to financial markets starting with our API-first stock brokerage. Alpaca offers commission-free stock trading via API, a suite of developer APIs for brokerages, advisors, and startups, as well as a market data API.

Alpaca Team

API-first stock brokerage. *Securities are offered through Alpaca Securities LLC*