Robinhood spikes 19% as SEC filing shows insider sales locked up pending regulator's review

Robinhood Vlad standing at Nasdaq time square billboard — Brendan McDermid/Reuters

Robinhood shares surged 19% on Friday following an update about a plan by early investors to sell stock.
Major stakeholders planning to sell millions of shares must wait for SEC clearance.
The stock has been on a wild ride in its first full week of trade following its IPO debut.
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Robinhood moved sharply higher Friday after a filing showed early stakeholders planning to sell millions of shares in the trading platform will have to wait for regulatory clearance, extending this week's volatile ride in the newly listed company.

Major shareholders on Thursday filed with the Securities and Exchange Commission to sell about 98 million Class A shares, putting them in line to raise about $3.4 billion. The move was met with a 28% slide in the price, ending a two-day rally that pushed the shares up by as much as 126%.

Then on Friday, Robinhood filed a notification that the pending share sales couldn't move forward until staff at the agency conduct a review. "No sales can be made off the Resale S-1 until the SEC declares it effective," the company said.

Shares of the company that's been the epicenter of the meme-stock frenzy this year spiked up as much as 19% to $60.88 then pared the gain to 7%.

The stock was still on course to finish its first full week of trading up by more than 50% and beyond the $38 a share IPO price. That price was at the low end of an expected range of $38-$42.

Robinhood stock slumped in its July 29 debut but popped higher during this frenzied trading week as Cathie Wood's Ark Invest and other long-term investors began to build a position in the platform.

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