Robinhood Files for IPO, Set to list on NASDAQ

Robinhood Markets, Inc. filed paperwork for its much-anticipated initial public offering.

Let’s take a closer look at the IPO

• The company filed an S-1 with the Securities and Exchange Commission (SEC), signalling its intent to go public. It plans to trade under the ticker symbol of “HOOD” on the NASDAQ stock exchange.
• However, Robinhood did not disclose information about its price range or the number of shares it aims to offer. These details will come with future filings.
• P. Morgan and Goldman Sachs & Co. LLC are acting as joint book-running managers for this initial public offering.
• Wells Fargo Securities, Citigroup, and Barclays are the active book-runners for the proposed offering.

Why does Robinhood plan to go public?

It seeks to raise a sum of $100 million by going public. Moreover, this amount is considered as a placeholder and is, therefore, subject to change with future filings.

The IPO puts Robinhood in a unique position, wherein its master plan is to use its own public trading to advantage and sell stock to customers. Robinhood will set aside 35% of its Class A stock for individual investors, which is a significant allocation for retail investors as compared to that in a typical IPO.

But what’s the hype all about?

• Robinhood’s initial public offering will be among the hotly anticipated IPOs in years, largely due to its part in changing the investing landscape.
• Renowned for revolutionising online trading, it encouraged millions of investors to sell and buy stocks, which was a “first” for most of them.
• However, this move comes right after the company found itself in hot waters. The company was slapped with a record-breaking penalty of $70 million for its systematic supervisory failures by Wall Street’s self-regulator FINRA.

Key highlights on Robinhood

• The American financial services company offers zero-commission stock trading.
• Founded in 2013 by current CEO Baiju Bhatt and Vladimir Tenev, this company aims to democratise finance for all.
• It has 17.7 million monthly active users (2020 figures).
• With Robinhood, individuals can invest with no account minimums, buy and sell crypto, and educate themselves on investing by way of easy-to-understand content.

Robinhood’s finances in a nutshell

Here is a glimpse into its finances:

• Its revenue jumped to $959 million in FY 2020 – a 245% increase from $278 million in FY 2019.
• The company recorded profit of $7.45 million in FY 2020, a significant improvement from a loss of $106.6 million in FY 2019.
• Its revenue more than tripled and stood at $522.1 million for 3 months ended 31 March 2021.

Summing up the IPO

Given its sound fundamentals, it can be lucrative for investors to subscribe to Robinhood stocks. The company will list its shares later in July.

Frequently Asked Questions

When did Robinhood file papers for IPO?

1 July 2021.

What is the face value of Robinhood shares?

Not yet disclosed.

Where is Robinhood listed?

It will be listed on the NASDAQ stock market.