Does the number of Robinhood’s subscribers influence the stock prices?

• Autor(a) principal: Fernandes, Pedro Miguel Machado
• Data de Publicação: 2021
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/25020
• topic: Robinhood; Stock prices; Retail investors; Dados em painel -- Panel data; Preço das ações; Investidores de retalho

The present work aims to study the influence of the increase in the number of Robinhood’s subscribers, who are retail investors, on the prices of stocks between 2018 and 2020. Furthermore, and because in the middle of this period the pandemic of COVID-19 has occurred, we also investigate the influence that the increase in the number of subscribers had on stock exclusively in the period after the first day of lockdown in the US, as the literature has verified a growing number of retail investors in this period. For this, we used a panel data approach, with daily data on the number of subscribers and stock prices. The stocks we chose for this study belong, essentially, to the top 20 S&P 500’s companies with the largest market capitalization. We found that the increase in the number of subscribers was not enough to significantly influence Robinhood’s stock prices, neither throughout all the studied period nor just after the first day of lockdown. In this sense, we later present some justifications for the results.