Robinhood Files IPO, Plans to go Public

After a controversial start to 2021, Robinhood, an online trading and investing service provider, intends to go public. Only a day after receiving the highest fine ever by wall street regulators, the company filed its IPO paperwork. Despite the drama regarding market manipulation and favoritism, many investors eagerly awaited Robinhood to move in such a direction. The company will launch under the Nasdaq stock exchange, with an appropriate ticker, HOOD. The company submitted its papers to the Securities and Exchange Commission, although it still can’t specify a date for public availability.

Unlike most IPOs, Robinhood filed for its while it was still profitable last year. The trading company generated a $7.45 million income with $959 million of profits during 2020. That displayed a significant improvement for the company over the previous year, as it lost $107 million in 2019. However, 2021 had quite a turbulent start as far as Robinhood is concerned, losing a whopping $1.4 billion in the first quarter. With its public offering, Robinhood hopes to raise a minimum of $100 million.

Robinhood noted how it had quite a significant growth in the number of user accounts on its platform.

Namely, the app contains 18 million users that have linked their bank and app accounts. Robinhood claims that more than half of those are first-time investors and traders. That’s a significant increase from the 7.2 million the company reported in 2020. The app holds about $80 billion in assets across its users.

Multiple banks, such as JPMorgan and Goldman Sachs, are the underwriters on the new deal. Robinhood intends to spread a solid deal of its IPO stocks to retail users. Namely, it’s between 20% and 35% of its shares to such customers. The number is much larger than what we’d expect, and beats most other IPO offerings.