Robinhood said Thursday that existing shareholders will sell up 97.9 million shares over time. The news knocked shares of the trading app that have surged this week.

In a filing, the commission-free broker said it will not receive any of the proceeds from the stock sale of 97,876,033 shares of its Class A common stock. The offering is through an automatic conversion of certain convertible notes held by the selling stockholders in connection with last week’s initial public offering.

The stockholders were among those who came to Robinbood’s rescue during the historic trading mania earlier this year. Faced with unprecedented volatility and increased deposit requirements, the broker was forced to tap credit lines and raised new debt to ensure it had enough cash to clear trades. It also briefly restricted trading in a number of short-squeeze names.

The selling shareholders include a number of venture capital firms that invested in Robinhood early on. For instance, New Enterprise Associates, which owns more than 10% of Robinhood shares, is among the list of sellers in this offering. Andreessen Horowitz, Iconiq Capital, Institutional Venture Partners and Ribbit Capital were also among the selling stockholders.

Robinhood set a maximum selling price at $35.12 per share for the offering. The total proceeds for the holders will be up to $3.44 billion.

The stock dropped as much as 12% in premarket trading on Thursday, and it pared losses to trade 8% lower at $64.65.

After a lackluster IPO last Thursday, Robinhood shares spiked this week as retail investors bid up the shares, reminiscent of the meme stock rallies the company helped perpetuate in names like AMC and GameStop earlier in the year.

The shares jumped 50% on Wednesday and had doubled for the week until Thursday’s decline. Buying by ARK Invest’s Cathie Wood and the start of options trading were also credited with helping to boost the shares.

Robinhood, which experienced massive growth thanks to the rise of retail investors, went public on the Nasdaq under the ticker HOOD. The stock priced at $38 per share, the low end of its offering range.



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