Alert: Trading App Robinhood Files For IPO

Robinhood logo

Robinhood, the popular stock trading app, has filed for its long-awaited initial public offering (IPO). It’s unveiled its SEC paperwork just a day after it agreed to pay a $70mn fine to settle accusations of misconduct from regulators.

  • Robinhood has unveiled its S-1 filing with the SEC, giving a peek into its business with information not publicly disclosed before. The company made $959mn in revenue for 2020, more than triple from $277mn in 2019. In 2020, it made a small net profit of $7.4mn, compared to a $107mn net loss in 2019.
  • For its IPO, Robinhood is earmarking up to 35% of the shares for retail investors in its app. It’ll be one of the few moments retail investors get to buy into a company at its IPO price. 
  • Unveiling its filing for an IPO just after it agreed to settle a major regulatory case for $70mn seems like that was the hurdle Robinhood was just waiting to go through to kick off its IPO process. That particular case was from the US Financial Industry Regulatory Authority (FINRA) and is separate from rumored SEC probes into its business.
  • With its fame, it seems Robinhood won’t need to work much to pitch its public offering to investors. In fact, the pile of retail traders on its app is already a huge force on par with many institutional asset investors. As it’s setting aside 35% of its IPO offering for retail traders, there may be a few things cooler than buying Robinhood stock on the Robinhood app.
  • Robinhood’s IPO will deliver an exit for the investors who have showered it with nearly $6bn in venture funding. Going into its IPO, the company’s biggest shareholders include DST Global, Index Ventures, Ribbit Capital, and New Enterprise Associates.
  • On the secondary private markets, Robinhood’s valuation has flirted as high as $40bn early this year. It’s unclear what valuation the company is targeting with IPO.
  • Robinhood plans to list on the Nasdaq exchange with the trading symbol “HOOD”. It’ll be one of the main poster children for the hot IPO markets this year, along with Chinese ride-hailing company Didi which recently completed a US IPO.

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