The IPO market was once heavily guarded by Wall Street, but some brokerage firms like Moomoo have made this market more accessible. That all came to a head when Bullish (NYSE:BLSH) had a blowout debut on Aug. 13. It turns out that institutional investors weren’t the only ones celebrating the stock’s 83% gain in its debut.
Bullish’s IPO won’t be the last successful IPO that generates strong enthusiasm from retail investors, and this trend can have a major impact on the stock market as a whole.
“As retail investors gain this unprecedented access, their influence is rippling through the market,” Moomoo U.S. CEO Neil McDonald told Benzinga in an interview. “This shift is not just about demand; it’s about reshaping which companies thrive. Businesses that resonate with retail audiences now have a clearer path to public success, as retail momentum complements (and sometimes even surpasses) institutional interest.”
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When hot stocks have their IPOs, most of the gains are registered before retail investors have a chance to accumulate shares. For most of the stock market’s existence, retail investors could only watch as IPOs that excited them shot well past their limit orders. Brokerage firms like Moomoo saw an opportunity to level the playing field.
“Today, digital platforms like Moomoo are upending this model, democratizing access in tangible ways,” McDonald said. “For example, Moomoo’s Bullish IPO allocation ensured 100% of subscribing Moomoo clients received shares. This contrasts with previous traditional IPOs, where oversubscribed deals often left retail investors empty-handed.”
However, there is one string attached for retail investors that also affects institutional investors. Moomoo mentioned a 180-day lock-up period for the Bullish IPO. Selling shares before the IPO lock-up period concludes can result in financial penalties, being unable to participate in future IPOs, and possible legal action for violating the agreement.
Investors can hedge their positions to minimize losses from post-IPO downward pressure to avoid selling their shares before the lock-up period concludes.
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Retail investors can reap higher returns if they get into promising growth stocks at their IPO prices. However, retail participation doesn’t only help retail investors. It also helps the corporations that want to enter the public market.
