Online brokerage Robinhood Markets Inc is encouraging users not to sell shares within the first 30 days of offerings.
On its website and in a recent note to customers, Robinhood warned that investors who sell or “flip” their IPO shares could be restricted from participating in future IPO deals for two months.
Rival fintech Social Finance (SoFi) enforces similar restrictions by collecting fines from “flippers” or customers who sell their shares to take advantage of first-day pops.
Robinhood’s new IPO platform is available to all customers, without any account limit restrictions. In May, FIGS Inc, which manufactures medical scrubs, became the first company to be listed on Robinhood’s IPO Access platform.