SPACs (Special Purpose Acquisition Companies) have experienced an enormous increase in interest and activity recently, mainly, due to the unusual volatility of markets caused by the Coronavirus pandemic. More and more venture funds, private equity (PE) firms, and high-profile private investors form SPACs to go public and merge with firms whose management teams don’t want to or can’t take their companies public via a traditional IPO.

Robinhood shares opened trading at $38 but later took a dive by 11%, finally ending the session at $34.82. The stock-trading start-up finished its first day of trading down 8.4% below its initial public offering price with a market capitalization of about $29 billion, showing retail investors' leeriness and skepticism over Robinhood’s mission of democratizing finance and upending Wall Street.

Robinhood has totally reshaped how online broker-dealers work, making stock trading available for the masses by offering investors, commission-free and gamified investing experience. This strategy turned out to be very lucrative bringing in a great deal of first-time investors and made profits. So how does Robinhood make money?