Robinhood confidentially files for IPO

Rick Steves

The year 2021 started with a significant PR problem for Robinhood amid the rise of r/WallStreetBets and the social trading frenzy which have fueled a short squeeze in the GameStop stock.

Robinhood Markets, Inc. has announced it has confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission.

The draft statement relates to the proposed initial public offering of its common stock, with the number of shares to be offered and the price range for the proposed offering still to be determined.

The IPO is expected to take place after the SEC completes its review process, subject to market and other conditions, the US-based neo broker stated.

The year 2021 started with a significant PR problem for Robinhood amid the rise of r/WallStreetBets and the social trading frenzy which have fueled a short squeeze in the GameStop stock.

The extreme volatility at the time, in GME and many other stocks touted on Reddit and other social media platforms, have resulted in restrictions to trading in a number of trading services, including Robinhood.

The US-based neo broker led by Vlad Tenev bore most of the shame as the venue was idolized for having the democratization of capital markets as its sole mission.

The issues Robinhood and many other trading firms faced were due to the two-day trade settlement period in a time of extreme volatility which led clearinghouse deposit requirements to skyrocket overnight. In this scenario, investors were kept waiting for trades to clear, while clearing brokers are kept from their deposits until the settlement is finalized two days after the trade.

Instead of mitigating risk, these requirements can induce quite the opposite effect, but with new risks. The whole post-trade controversy has led many within the industry to call for real-time settlement. Robinhood’s CEO Vlad Tenev and others are calling the trading industry, Congress, regulators, and other stakeholders “to come together to deploy our intellectual capital and engineering resources to move to real-time settlement of U.S. equities”.

“Accomplishing this won’t be without its well-documented challenges, but it is the right thing to do and Robinhood is eager to drive this critical effort on behalf of all investors. Technology is the answer, not the oft-cited impediment. We believe it is important for all relevant stakeholders to convene in the near term to discuss the urgency and necessity of this issue”, Mr. Tenev added.

Despite the bad publicity, Robinhood has found huge growth in new customer accounts since the pandemic and during the social trading frenzy. Robinhood is thus moving forward with the IPO plans.

Read this next

Retail FX

Weekly Roundup: John Oliver rips into MetaTrader, Binance to pay $10 billion

Welcome to this week’s roundup, where we delve into the latest developments in the Forex, Fintech, and cryptocurrency markets. Stay ahead of the curve with our comprehensive overview of the week’s most impactful events and trends across these dynamic sectors.

Retail FX

Lark Funding reopens to US traders, MyFundedFX picks cTrader

Canada-based prop trading firm Lark Funding announced it will once again welcome clients from the United States.

Institutional FX

Cboe FX volume falls to lowest level since summer

Cboe’s institutional spot FX platform, known as Cboe Spot, today announced its trading volume for the month ending February 2024, which took a step back after a strong rebound in December.

Retail FX

ThinkMarkets secures lucrative DFSA license in Dubai

Melbourne-based broker ThinkMarkets has secured a license from the Dubai Financial Services Authority (DFSA) after it has already incorporated its new subsidiary in the Dubai International Financial Center (DIFC).

Digital Assets

New Horizen Lays Out Its Vision Of A Modular, Proof Verification Layer For Web3 Networks

Horizen is forging a new path for the future of blockchain with its New Horizen initiative, which is building a modular Proof Verification layer that’s dedicated to verifying cryptographic proofs for any settlement layer, beginning with Ethereum. 

Digital Assets

Karma3 Labs Raises a $4.5M Seed Round Led By Galaxy and IDEO CoLab to Build OpenRank, a Decentralized Reputation Protocol

Using OpenRank, developers and web3 companies can build consumer apps where people can discover, use, fund, read, or buy something on-chain without worrying about getting spammed or scammed.

Digital Assets

Worldcoin down as Elon Musk sues OpenAI CEO Sam Altman

Worldcoin’s (WLD) token dropped following news of a lawsuit against related company OpenAI. The lawsuit was filed by Elon Musk and accused OpenAI and CEO Sam Altman of breach of contract.

Institutional FX

Exegy’s Liquidity Lamp adds intraday data to outperform S&P 500 by 31.8%

Exegy has incorporated intraday signals into its AI-powered iceberg order detection tool, Liquidity Lamp. By adding intraday data to a baseline mean reversion strategy, Exegy’s model outperformed the baseline by 10.5% and the S&P 500 (SPY) by 31.8%, respectively in the out-of-sample testing.

Industry News

Think Elon Musk backed your crypto exchange? ASIC’s latest reveal may shock you

In an absolutely shocking turn of events that nobody could have possibly seen coming, the Australian Securities and Investments Commission (ASIC) has bravely stepped forward to reveal that, yes, those videos of Elon Musk passionately endorsing a cryptocurrency exchange are as fake as a three-dollar bill.