HOOD, SOFI, BULL Stocks Decline Despite PDT Rule Change: Can SpaceX IPO Reverse The Trend?

• HOOD stock is down more than 6% so far this week, headed for its worst weekly performance in a month. 
• On Thursday, the Pattern Day Trader rule, which required investors using margin accounts to maintain at least $25,000 in account equity, ended.
• Another potential catalyst for brokerage companies is SpaceX's upcoming IPO, slated for later this month, as they are all expected to offer eligible retail investors access to shares.

Shares of brokerage companies Robinhood Markets Inc. (HOOD), SoFi Technologies Inc. (SOFI), and Webull Corp. (BULL) are on track to finish the week lower despite the elimination of the Pattern Day Trader (PDT) rule.

However, growing anticipation around the upcoming mega SpaceX initial public offering could be favorable for retail brokerage firms, serving as a customer acquisition opportunity, even as trading activity could get a boost from the change in the PDT rule.

HOOD stock is down more than 6% so far this week, headed for its worst weekly performance in a month. Meanwhile, SOFI and BULL stocks are down nearly 6% and 5%, respectively, for the same period.

PDT Rule Change: What It Means For Brokerage Firms

On Thursday, the Pattern Day Trader (PDT) rule, which required investors using margin accounts to execute four or more day trades within five business days to maintain at least $25,000 in account equity, ended.

Under the new framework, brokerages will rely on intraday margin requirements and risk-based monitoring. The change in the rule could potentially increase trading activity across retail brokerage platforms.

“Retail investors have proven they are smart, resourceful, and capable of managing their own exposure,” Anthony Denier, U.S. chief executive of Webull, said, according to the Wall Street Journal.

Among the major brokerage firms, Webull likely has the most direct exposure to the PDT catalyst, as President Anthony Denier said recently that the company’s average account size is just below $5,000, suggesting many customers may have been constrained by PDT restrictions. Denier said the company expects transaction activity to increase by at least 20% over time following the rule change and described the development as a significant opportunity for the industry.

Robinhood has also actively promoted the transition, saying it will remove existing PDT flags from customer accounts and allow users to trade without day-trading limits tied to the old rule.

“No more $25K minimum, no more flags. Happy trading,” the company said in a post on X. Speaking at the Piper Sandler Global Exchange and Fintech Conference, Robinhood Chief Brokerage Officer Steve Quirk also highlighted the heightened retail activity, as per a note from TheFly.

"I think in April we had our second-highest month in equity trading, option trading, highest month in futures, and in prediction markets," Quirk said. "And in May it has been very strong." Wall Street has also taken note, with Goldman Sachs analyst James Yaro recently raising his price target on Robinhood to $105 from $95, while maintaining a ‘Buy’ rating.

Meanwhile, SoFi has focused on strengthening its broader financial ecosystem. The company recently launched SoFi Coach, an AI-powered financial assistant designed to help users manage spending, debt and financial decisions, as it continues pursuing its strategy of becoming a comprehensive financial services platform.

Can SpaceX IPO Drive Higher Engagement?

Another potential catalyst for the companies is the upcoming public debut of SpaceX, expected to be one of the biggest IPOs in history.

Robinhood, SoFi, Fidelity, Charles Schwab and E*Trade are all expected to offer eligible retail investors access to shares. The offering has generated significant interest due to SpaceX's scale, brand recognition and the involvement of CEO Elon Musk.

Historically, high-profile IPOs have attracted new customers to brokerage platforms and increased trading activity. Brokerages are already collecting indications of interest from customers as they seek allocations for the offering.

“Proud to support investment opportunities,” SoFi said in a post on X, sharing a link to the IPO access page.

While some brokerages are putting limits on who is eligible to participate, Robinhood, SoFi and E*Trade do not have explicit minimum portfolio size requirements.

What’s Retail’s Take On SOFI, BULL, HOOD?

On Stocktwits, retail sentiment for HOOD and SOFI was 'bullish' amid 'high' message volume, while it was in the 'bearish' territory for BULL amid ‘low’ message volumes.

One user said, “$HOOD taking away that day trader restriction  the skys the limit here.  especially with the biggest ipo in history about to hit .  this stock is the tool that people will use .  its game over.”

Another user said, “$SOFI just opened access for users to express interest in the upcoming SpaceX IPO ahead of the expected June 12 debut….This is another step toward retail getting early access to one of the most anticipated IPOs in years, and it adds a new catalyst layer for SoFi’s investing platform.”

HOOD shares have increased more than 21% in the past year, while SOFI stock has surged more than 25%. Meanwhile, BULL stock has fallen about 41%.

For updates and corrections, email newsroom[at]stocktwits[dot]com.