Is Robinhood — the trading app of choice for investors in ‘meme stocks’ (such as GameStop) — becoming a meme stock itself?

Shares in the company surged by as much as 81% overnight before closing at US$70.39 — a gain of 50.4%.

That marked the second wild day of trade after a 24% rally on Tuesday, following a slow start when the company listed last week.

Robinhood shares and the rise of retail

Robinhood’s IPO was one of the most anticipated listings of the year on US capital markets, as the company raised capital at US$38 a share with a valuation of $32 billion.

And data from Australian share trading platform Stake — which gives investors exposure to the US market — shows local investors have also taken a keen interest in the stock.

“Investors on Stake traded US$8.9m in the stock over the last four days. This makes Robinhood the second most popular listing in the platform’s history behind Coinbase,” Stake’s chief marketing officer Bryan Wilmot told Stockhead.

And the majority of that trading has taken place amid Robinhood’s surge over the past two trading sessions, he added.

While the Stake data indicates strong retail interest, well-known tech investor Cathie Wood from Ark Invest has invested around $250m in the company since it listed last week.

The heady gains this week also coincided with the commencement of options trading in Robinhood shares, which kicked off last night.

Options trading contributes the largest portion of Robinhood’s revenue, at almost 40%. Equities trading is the second largest contributor at around 25%.

The platform also provides access to cryptocurrencies, and was cited as one of the primary trading platforms for the surge in Dogecoin in the first half of this year.

While some in the investment community have cited potential risks from the heightened level of retail trading that Robinhood has facilitated, there’s also the argument that companies such as $HOOD and $COIN have ushered in a new era of investing.

“Robinhood is providing investors direct access to the growing fintech space, a sector that hasn’t been overly accessible on public markets so far,” Wilmot said.

“And if you look at the biggest IPOs for Stake customers, it’s Coinbase and Robinhood. The core thread here is that these companies are providing better access to financial opportunities.”

“So for all its criticisms, clearly investors can see that the rise of retail investing is not a flash in the pan but instead it’s a cultural and generational shift that has emerged,” he said.

“Companies that provide access to this new generation of investors are going to succeed. And investors are backing these companies in with their dollars.”