Baiju Bhatt and Vlad Tenev attend Robinhood Markets IPO Listing Day on July 29, 2021 in New York City.

What’s taking place: The firm’s stock got off to a rocky start when it made its Wall Street debut final week, ending its first day of buying and selling down 8% from its preliminary public providing value. Then, this week, shares took off, skyrocketing 24% on Tuesday and an eye-popping 50% on Wednesday.

According to knowledge from researchers at VandaTrack, Robinhood was the third most-bought stock on retail platforms Wednesday, securing $50.5 million in web purchases.

Some context: VandaTrack notes that Robinhood’s positive aspects are nonetheless dwarfed by the unique meme shares, GameStop and AMC Entertainment. At the peak, retail buyers purchased $352 million value of shares of the struggling online game retailer and $600 million of stock in the movie show chain.

Still, Robinhood is benefiting from a bunch of things. Options buying and selling for the stock began Wednesday, and distinguished fund supervisor Cathie Wood has revealed sizable purchases in latest days. Robinhood has additionally actively courted on a regular basis buyers who could also be involved in shopping for shares.

There might nonetheless be “room for the move to continue,” VandaTrack analyst Ben Onatibia mentioned. He famous that the soar is uncommon, nonetheless, which makes the trajectory onerous to foretell.

“After a poor listing, retail demand is surging, something extremely rare with IPOs,” he mentioned.

On the radar: Meme stock or in any other case, Robinhood might ultimately run into hassle purely based mostly on its enterprise mannequin.

Robinhood earned 81% of its first quarter income by means of what’s often known as “payment for order flow,” which is more and more coming beneath regulatory scrutiny.

Breaking it down: The purpose Robinhood would not have to cost fee is as a result of it makes cash in a distinct a part of the buying and selling course of. When an investor locations an order to purchase a stock on its app, Robinhood routes the order to a market maker like Citadel Securities, which then handles execution — and pays Robinhood for that privilege.

Scrutiny of this course of has elevated since the GameStop frenzy. While the firm argues it is a essential a part of its efforts to democratize buying and selling, Securities and Exchange Commission Chair Gary Gensler mentioned in June that cost for order stream raises “questions about whether investors are getting best execution,” and famous that directing large swaths of trades to some choose market makers might “increase potential system-wide risks.”

Should regulators take motion, Robinhood’s enterprise might be in jeopardy.

“An outright ban on payment for order flow would immediately and severely impact Robinhood’s revenue,” analysis agency New Constructs mentioned final month. “We don’t believe Robinhood could continue offering commission-free trading, which would put the company at a significant disadvantage to rivals Fidelity and Charles Schwab.”

Uber’s nice driver scarcity is dear

Riders are flocking again to Uber as vaccines give individuals recent confidence to depart their houses and journey round. But the firm has needed to spend a ton of cash to get sufficient drivers on its platform, hurting its backside line.

The newest: Uber (UBER) mentioned Thursday that it misplaced an adjusted $509 million in the April-to-June interval. That’s down from $837 million a 12 months in the past, however worse than the $359 million loss it posted throughout the first quarter of 2021.

An enormous downside for the ride-hailing firm was the quantity it needed to spend on incentives for its drivers.

“The marketplace was not at a place that we considered healthy and we wanted to lean in to get wait times down, to get surge levels down,” CEO Dara Khosrowshahi mentioned on a name with analysts.

Khosrowshahi mentioned the firm is making good progress, growing month-to-month lively drivers and couriers in the United States by practically 420,000 from February to July, and has began pulling again short-term perks.

But he acknowledged that in cities like New York, San Francisco and Los Angeles, “demand continues to outplay supply and prices and wait times remain above our comfort levels.” Shares are down 4% in premarket buying and selling.

Not simply Uber: Lyft (LYFT) additionally needed to make “significant investments in driver supply throughout the quarter,” main common hourly earnings for drivers to succeed in an all-time excessive in the spring.
Finding sufficient employees to fulfill demand has been an issue throughout industries, with meals service, logistics and meals processing additionally reporting issues. Executives at firms like McDonald’s (MCD), which have raised wages, say the state of affairs is enhancing, however they don’t seem to be out of the woods but.

Nintendo’s pandemic sizzling streak is fizzling

Nintendo’s pandemic growth may be coming to an end.

The Japanese firm mentioned Thursday that gross sales fell practically 10% in the quarter ending in June, an indication that fewer individuals stayed at residence to play video video games as some nations round the world started to reopen, my NCS Business colleague Michelle Toh experiences.

Operating revenue dropped greater than 17% to 119,752 billion yen (about $1 billion) in comparison with the similar time a 12 months in the past, as gross sales of its Switch consoles slumped.

Logging off: During the quarter, 4.5 million models of Switch {hardware} had been bought — down about 22% from the 5.7 million recorded the earlier 12 months.

The firm blamed “factors such as logistics delays caused by Covid-19 and the impact of the semiconductor shortage on production.”

But the occasions are additionally altering. “Animal Crossing: New Horizons” — the Switch title that was a breakout sensation of the pandemic — bought simply 1.3 million copies final quarter, in comparison with 10 million in 2020.

Investor perception: The firm has constantly posted one blowout quarter after one other throughout the pandemic. But it is also been dogged by issues about how lengthy it might probably hold its sizzling streak going. Those worries could also be coming to cross.

Up subsequent (CARS), Datadog (DDOG), Dine Brands (DIN), Kellogg (K), Moderna (MRNA), Papa John’s (PZZA) and ViacomCBS (VIACA) report outcomes earlier than US markets open. Beyond Meat (BYND), Cloudflare (NET), Dropbox (DBX), GoPro (GPRO), Monster Beverage (MNST), Shake Shack (SHAK), Yelp (YELP) and Zillow (Z) observe after the shut.

Also in the present day:

  • The Bank of England makes its newest coverage announcement.
  • Initial US jobless claims for final week submit at 8:30 a.m. ET.

Coming tomorrow: The US jobs report for July arrives after non-public payroll positive aspects got here in a lot smaller than anticipated.