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Robinhood Falls in Trading Debut Closes 8.4% Lower at $34.82 Per Share

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Robinhood Markets Inc - Investors King

The investing app tumbled in its highly anticipated trading debut on Thursday, closing 8.4 percent below its initial public offering price.

Robinhood stock opened at $38, matching the IPO price, and quickly fell more than 10 percent. The stock later climbed to approach the IPO price before falling again in the final hour of trading to close at $34.82, Robinhood’s market capitalization was about $29 billion.

It was a disappointing debut for the company that brought the markets to the masses. Robinhood and its bankers tried to avoid a poor first-day performance by pricing shares at the bottom of its targeted range at a value of about $32 billion. A successful first day was the more important because Robinhood sold a big chunk of its shares to its own customers.

According to people familiar with the matter, breaking the Wall Street convention of giving individual investors only a minuscule slice of hot IPOs, Robinhood sold between 20 percent and 25 percent of its offering to its customers.

“One of our company values is ‘participation is power,’” Chief Executive Vlad Tenev said in an interview. “It didn’t seem right for us that IPOs had typically been reserved for the top 1 percent.”

Trading for the first time under the ticker HOOD, the online brokerage hit the public markets it seeks to democratize for amateur investors.

Robinhood, whose stock trading app has surged in popularity among retail investors is valued at 10.5 times forward EBITDA.

The company sold 52.4 million shares, raising close to $2 billion. Co-founders Vlad Tenev and Baiju Bhatt each sold about $50 million worth of stock. The company was last valued in the private markets in September at $11.7 billion.

Goldman Sachs and JPMorgan Chase are the investment banks that led the deal. Underwriters will have an option to buy an additional 5.5 million shares.

Unlike many recent IPOs, Robinhood was profitable last year, generating a net income of $7.45 million on net revenue of $959 million in 2020, versus a loss of $107 million on revenue of $278 million in 2019.

However, the brokerage had a loss of $1.4 billion in the first quarter of 2021 tied to emergency fundraising-related losses during January’s GameStop trading mania. The company generated $522 million in revenue in the quarter, up 309 percent from the $128 million earned a year earlier.

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Nigerian Stock Exchange

Stanbic Africa Holdings Limited Renews Confidence in Stanbic IBTC, Invests Additional N410.595 Million

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Stanbic IBTC Bank logo - Investors King

Stanbic Africa Holdings Limited, a significant shareholder of Stanbic IBTC Holdings Plc, in a show of confidence has invested an additional N410,594,646.7 in Stanbic IBTC Holdings Plc.

The lender disclosed in a statement signed by Chidi Okezie, Company Secretary and obtained by Investors King.

Stanbic Africa Holdings Limited invested the amount in stocks of Stanbic IBTC Holdings Plc in two transactions last week.

Earlier in the week, on September 13, 2021, Stanbic Africa Holdings Limited purchased 5,000,000 units of Stanbic IBTC shares at N38.88 a unit or invested N194,400,000 in stocks of Stanbic IBTC.

On September 14, 2021, another 5,557,703 units of Stanbic IBTC shares were acquired at N38.90 a unit or invested another N216,194,646.7 in stocks of Stanbic IBTC. Therefore, a total sum of N410,594,646.7 was invested in Stanbic IBTC Holdings Plc last week.

The disclosure was in line with the Nigerian Exchange Limited’s insider dealing disclosure policy instituted to foster transparency across the exchange.

Stanbic Africa Holdings Limited is a Private limited with Share Capital company based in 20 GRESHAM STREET, LONDON LONDON, United Kingdom.

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Nigerian Stock Exchange

Stock Market Returns to Bullish Trend, Gained N11 Billion Last Week

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Stock Bull - Investors King

The Nigerian Exchange Limited (NGX) returned to the green zone last week following two consecutive weeks of decline.

Investors exchanged 856.289 million shares worth N10.752 billion in 15,663 deals during the week, in contrast to a total of 1.426 billion shares valued at N13.073 billion that exchanged hands in 19,315 transaction in the previous week.

In terms of volume traded, the financial services industry led the activity table with 583.038
million shares valued at N3.971 billion traded in 7,894 deals. Therefore, contributing 68.09 percent and 36.93 percent to the total equity turnover volume and value, respectively.

In the second place was the consumer goods industry that followed with 62.961 million shares worth N3.197 billion that were traded in 2,579 deals. The ICT Industry came third with a turnover of 45.745 million shares worth N1.646 billion in 775 transactions.

Access Bank Plc, Universal Insurance Plc and Wema Bank Plc were the three most traded stocks last week, accounting for a combined 211.151 million shares worth N789.843 million in 1,403 deals and contributed 24.66 percent and 7.35 percent to the total equity turnover volume and value, respectively.

NGX All-share Index gained 22.09 index points or 0.06 percent to 38,943.87 index points last week, up from 38,921.78 it traded in the previous week. The market value of all listed equities expanded by N11 billion or 0.05 percent from N20.279 trillion it closed in the previous week to N20.290 trillion last week.

Similarly, all other indices finished higher with the exception of NGX Banking, NGX Insurance, NGX MERI Growth, NGX Consumer Goods, NGX Oil/Gas and NGX Industrial Goods indices which depreciated by 0.79 percent, 0.58 percent, 0.12 percent, 0.21 percent, 3.35 percent and 0.24 percent, respectively. While the NGX ASeM, NGX Growth and NGX Sovereign Bond Indices closed flat.

The Exchange has now gained 2.73 percent in the third quarter but declined by 0.70 percent in month of September to bring year to date return to – 3.29 percent.

Top 10 Price Decliners

 

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Bonds

Lagos Free Zone Company Issues N10.5B Series 1, 20-year Corporate Infrastructure Fixed Rate Bond in Nigerian Capital Market

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Lagos Free Zone-Investors King

Lagos Free Zone Company (LFZC), the first free zone in Nigeria with a fully integrated deep seaport, is pleased to announce the successful issuance of  NGN10.5 billion 20-Year Series 1 Senior Guaranteed Fixed Rate Corporate Infrastructure Bonds Due 2041 LFZ Bonds) under  NGN50 billion Debt Issuance Programme.

LFZC is the infrastructure development subsidiary of Tolaram, the Singaporean conglomerate with more than 45 years of presence in Nigeria and business interests in consumer goods, infrastructure and fintech space. Lagos Free Zone is being developed as the largest integrated port-based economic zone in Nigeria and shall serve as the beacon of industrial development across Nigeria and West Africa.

Enterprises operating in the Lagos Free Zone will benefit from various policy incentives underpinned by the legislative framework applicable for free zones in Nigeria. In line with its vision statement – “to be the preferred industrial hub in West Africa with world-class infrastructure”, the zone is equipped with a host of shared industrial infrastructure necessary for attracting investments from the leading trade partners of Nigeria.

Backed by an irrevocable and unconditional guarantee from InfraCredit, LFZC Series 1 Bond is accorded a ‘AAA’ long term credit rating by Agusto and Co. and GCR, reflecting the highest degree of creditworthiness for these bonds. The Series 1 Bond, a 20-Year Guaranteed Fixed Bond, was oversubscribed by institutional investors including eleven domestic pension funds, two insurance firms, banks and HNIs.

The transaction is the first 20-year non-FGN Bond issue in the Nigerian debt capital market and the first Securities and Exchange Commission-approved Infrastructure Bond for the development of an industrial hub. The Series 1 Bond priced at a modest premium to the comparable FGN Sovereign Bond, provides a unique opportunity for pension fund managers, life insurance firms and other institutional investors to match their long-term liabilities with low-risk, high yield assets.

Speaking on the transaction, the Chief Finance Officer (‘CFO’) of LFZC, Mr. Ashish Khemka stated: “This is a milestone transaction for us at Lagos Free Zone Company and it is a testament to the capacity of the Nigerian debt market as a veritable source of domestic capital for infrastructural development in Nigeria. The response to this bond program further strengthens our commitment to realize our vision and thereby enhance Nigeria’s competitive positioning with our continuous focus on Ease of Doing Business parameters.

LFZ further underscores Nigeria as a compelling industrial hub within the West African coast and ideally orients itself in anticipation of the imminent single market regime under AfCFTA. We are particularly excited by the confidence demonstrated by pension fund managers and other institutional investors at this debut issue and we appreciate the team at InfraCredit, StanbicIBTC Capital and other parties to the transaction for this novel structure, which helps to de-risk the transaction and aligns the interest of different stakeholders”.

According to the CEO of InfraCredit, Chinua Azubike, “It has been exciting working with Lagos Free Zone Company on this landmark transaction. It further demonstrates our commitment towards inclusive access to long term local currency finance for infrastructure development. Interestingly, LFZC has set a new benchmark in the Nigerian domestic debt capital market, as the first 20-Year Corporate Infrastructure Bond in Nigeria, elongating the corporate bond yield curve and reinforcing the prospect for Nigerian Corporates to raise long term finance within the local market.

The LFZC Bonds validates the appetite of domestic pension funds and other institutional investors in financing viable long term infrastructure assets. We would continue to partner with all relevant stakeholders in executing novel strategies towards unlocking domestic capital for infrastructure finance, in addition to creating quality asset classes for diversifying investment portfolios of local institutional investors”.

Also commenting on the transaction, Funso Akere, Chief Executive of Stanbic IBTC Capital Limited, said: “Stanbic IBTC Capital, FBNQuest Merchant Bank and Radix Capital Partners are delighted to have advised LFZC on this landmark 20-year Infrastructure Bond issuance, which evidences the depth and liquidity of the Nigerian debt capital markets and aligns with the pension fund industry’s growing demand for quality long-dated assets. The success of the transaction demonstrates investors’ confidence in the vision and purpose of the Lagos Free Zone and we thank the Board and Management of LFZC for giving the Issuing Houses a free hand to guide the process to successful completion.

Supporting infrastructure development is a key pillar for Stanbic IBTC and we are very pleased to have acted as Lead Issuing House to this landmark infrastructure bond issuance, which is the longest tenor corporate bond issuance in the history of the Nigerian debt capital markets.”

Funso noted that LFZC is focused on delivering essential infrastructure to ease the cost of doing business and facilitate the entry of global industrial brands into Nigeria, which is expected to boost sustainable development, galvanize economic growth and improve the livelihoods of Nigerians, while also deepening the Nigerian debt capital markets through the issuance of innovative debt instruments.

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