'Watch 'Em Burn': WallStreetBets Rejoiced As Robinhood's IPO Tanked

Robinhood stock tanked when it opened, leading many of the WallStreetBets Redditors who used the platform to trade meme stocks to rejoice.

About an hour before the market closed on Thursday, one regular of the subreddit, u/dancinadventures, crafted a Robinhood Due Diligence—a deep dive into whether a potential investment is made—that ultimately advocated for shorting Robinhood.

The top comment is a great summary of the subreddit’s general reaction to the Robinhood IPO: "Dont buy. Dont sell. Watch em burn 🔥🔥🔥"

Robinhood stock has since recovered and is up slightly from its IPO opening. Redditors nonetheless are hoping for the stock to crash.

The most popular thread about Robinhood features a CNBC image of co-founders Vladimir Tenev and Baiju Bhatt debuting their stock on IPO day, with a quote edited below that reads: "'We rob idiots on every trade because they just love the interface' -a young bulgarian boy." Tenev, who is also Robinhood’s chief executive, was born in Bulgaria.

A host of other comments shared the same anger (and joy) over watching Robinhood’s shares close below their debut: "I waited for just this day to close my account. Fuck off RH," one user said before touching off a discussion about why other brokerage platforms were superior to Robinhood. "I'd like to thank the founders for introducing me to Fidelity" added another user elsewhere

All of this, of course, refers to the huge controversies that emerged earlier this year when during the Gamestop short squeeze Robinhood halted trading of Gamestop and other popular meme stocks, costing retail traders the change to bleed hedge funds for billions more than they already had (and the chance to make some money themselves). 

At this point, two groups of WallStreets users—those who believe they halted trades maliciously on behalf of certain investors and clients and those who think it is a vastly overvalued software company—hate the company for the same reason: its order of flow business model. Still, that has not prevented a few scattered individuals from defending the company.

“Ok hear me out - a stock dropping on day one after IPO indicates a successful IPO. The company got as much money as possible in the offering, so much so that investors now don't think it was worth that much,” said u/Trollslayer0104, in one of the only positive comments about the company. “The alternative, often seen as successful, that the price goes up on day one, indicates that the company left money on the table.”

That, another user pointed out, is correct if you are an underwriter. Most people, however, want to make as much money as possible off the company's stock, not the reverse. For employees, executives, and investors who poured capital into its funding rounds, they made their money many times over as they own shares or options to buy shares for a fraction of the current share price.