Robinhood Markets’ (HOOD) stock is down 2% on March 30 amid reports that Morgan Stanley’s (MS) E*TRADE has been chosen to sell shares to retail investors as part of the upcoming initial public offering (IPO) of Elon Musk’s SpaceX.
Claim 30% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
According to reports, E*TRADE is positioned to gain an edge over rival Robinhood in the highly anticipated IPO that’s expected later this year. Morgan Stanley, a lead underwriter on the deal, is expected to route a significant portion of shares set aside for retail investors through its E*TRADE platform.
The move by Morgan Stanley is expected to crowd out competing platforms such as Robinhood Markets and could exclude them altogether from what’s expected to be the biggest IPO ever. SpaceX aims to raise $75 billion at a current valuation of $1.75 trillion.
Morgan Stanley the Big Winner?
Media reports say that SpaceX is considering excluding Robinhood from its IPO altogether, though the online brokerage is in discussions to handle some of the sales. The sources noted that plans are not final and could change as SpaceX nears its IPO in the coming months.
The exclusion would be unusual for Robinhood, which has become a fixture of marquee listings, including the $55 billion IPO of Arm Holdings (ARM) in 2023. Robinhood has reportedly pitched for roles on the deal that aren’t tied to any of the underwriting on the blockbuster transaction.
Is HOOD Stock a Buy?
Robinhood’s stock has a consensus Strong Buy rating among 17 Wall Street analysts. That rating is based on 15 Buy and two Hold recommendations issued in the last three months. The average HOOD price target of $118.07 implies 83% upside from current levels.
