Gamestop – Robinhood Files for IPO. Everything to Know.
Robinhood Markets, the zero-commission investment app that has revolutionized online trading, has disclosed its plans to go public.
It will be among the most highly anticipated initial public offerings in years, in large part because of how Robinhood has changed the investing landscape, encouraging millions to buy and sell stocks, many of them for the first time.
In a prospectus published on Thursday, Robinhood says it has 18 million funded accounts for the quarter ended March 31, more than double the 7.2 million accounts for the same period in 2020.
According to the filing, the company is seeking to raise $100 million. It did not disclose how many shares it would offer or their price range. That information will come with future filings. The $100 million is also considered a placeholder that will change with future filings. It will trade under Fintech Zoom HOOD on the Nasdaq market.
Companies must wait 15 days after making public the prospectus for an initial public offering before beginning a roadshow. This means Robinhood could list its shares later in July.
For the year ended Dec. 31, Robinhood reported a profit of $7.4 billion, compared with a loss of $106.6 million in 2019.
The company had $1.4 billion in losses for the March 31 quarter, up from $52.5 million in losses for the same period in 2020. Revenue more than tripled, to $522.1 million for the three months ended March 31. Most of the first-quarter losses were a result of a write-off from a change in the fair value of convertible notes and warrants after a $3.4 billion fund raising in February, a person familiar with the situation said.
Founded in 2013, Robinhood has said its mission is to democratize finance. The Menlo Park, Calif.-based company offers commission-free trading on stocks and other investments. Robinhood sends customer orders to market makers like Citadel Securities, Virtu Americas, and G1X Execution services. It employed 1,281 people in 2020.
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Robinhood competes against brokers like
(SCHW), TD Ameritrade (owned by Schwab), Fidelity Investments, E*Trade, which has been acquired by
Interactive Brokers Group
(IBKR). These firms have eliminated online trading commissions as well.
Robinhood is also trying to make IPOs accessible to retail investors. Customers of Robinhood, who take part in its IPO Access, can buy shares of certain offerings. Recently, Robinhood customers were able to buy about 1% of stock in the IPO of
(FIGS), which sells medical scrubs. It is unclear how many Robinhood clients received shares in that IPO. A Robinhood spokeswoman declined to comment.
The company is setting aside as much as 35% of its shares in the IPO for sale to Robinhood customers through its IPO Access feature, the prospectus said.
Earlier this year, Robinhood came under intense scrutiny because of its handling of the frenzied trading in GameStop (ticker: GME) shares in January. At that time, Robinhood restricted buying of certain stocks including GameStop, BlackBerry (BB), AMC Entertainment Holdings (AMC), and Bed Bath & Beyond (BBBY). The company has said it was forced to curb trading because of escalating financial demands from its clearinghouse.
Robinhood has raised $5.6 billion in funding, Crunchbase said. That includes $3.4 billion collected earlier this year. The fintech was valued at nearly $12 billion before the IPO but that number was expected to hit $40 billion with the offering.
The prospectus lists 17 investment banks working on the deal. Goldman Sachs and J.P. Morgan are the lead underwriters on the deal.
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