Robinhood plans for valuation of $35 billion in mega IPO

Karthik Subramanian

Robinhod Markets, the company that runs the stock trading app that has been making waves among the younger generation, has revealed that it is targeting to be valued at $35 billion in its initial public offering.

About 55 million shares are being offered in the IPO and with each share expected to be valued between $38 to $42, it is looking to collect $2.3 billion from the IPO. The platform offers unlimited commission-free trading on stocks, ETFs, and cryptocurrencies and though it has had many competitors over the years, the user experience and the smooth flow of the UI that it provides for users has been unparalleled so far which has made it very high demand by the younger users.

Nearly 2.63 million of these shares that are being offered would come from the founders and the CFO with the founders continuing to hold the majority of the voting power even after the IPO. The filing also said that the platform had 18 million funded accounts as of March 31 of this year.

The company had faced a lot of criticism at the beginning of the year over its handling of the trading surrounding meme stocks like GameStop. Though this issue helped it to multiply its trading volumes and revenues manifold as lots of traders jumped in to make quick money, it was also forced to stop and regulate the trading to avoid getting into trouble over capital demands.

At that time, it had also raised over $3 billion at a valuation of $30 billion to meet the liquidity demands. This also has been a difficult year for IPOs in general especially those IPOs belonging to very large companies. The IPOs that were launched this year haven’t performed very well and it will indeed be a test for the Robinhood IPO and the market as a whole when the trading is launched for it.

The company has also committed to offering 20% to 35% of the shares to the users of RobinHood itself in a way, that it believes, would be democratizing the IPO ecosystem which has long been the realm of large investors who usually get a huge slice of the pie. This is likely to drive up the retail demand for the stock which should help to support the price at least in the short term.

Read this next

Retail FX

Texas Slaps Forex Scam with Cease and Desist Order

The Texas State Securities Board (TSSB) is following through on its promise to crack down on online trading fraud.

Industry News

JPMorgan Chase to open its UK neobank next week

JPMorgan Chase, the biggest US bank by total assets, will next week launch its City’s digital-only bank, which offers a range of savings and loan products under its ‘Chase’ brand in the UK.

Retail FX

TIOMarkets UK reports $78,461 in 2020 revenues

TIOmarkets’ FCA-regulated entity reported its financial results for the year ending December 31, 2020. The company posted a revenue figure that was nine times the amount it reported in the fiscal year of 2019.

Technology

Equiduct deploys big xyt’s data analytics for equity market structure

“Banks, asset managers, exchanges and market participants across the globe consistently rely on big xyt as an independent reference for equity market structure”.

Retail FX

BDSwiss partners with PayRetailers to address payment landscape in LATAM

PayRetailers’ suite of payment options via single seamless API integration will be available for BDS Markets Ltd. only.

Digital Assets

Coinbase applies for NFA license while awaiting SEC lawsuit

A license from the National Futures Association (NFA) would open the door to cryptocurrency derivatives trading.

Industry News

Euroclear acquires MFEX to enhance offering for fund distributors and fund managers

This transaction brings together two highly complementary businesses.

Industry News

Madoff Victim Fund sends $568 million to 31,000 victims of Ponzi scheme

Bernard L. Madoff used his position as chairman of BLMIS to steal billions from his clients.

Digital Assets

Revolut uses Bitcoin to Pay for its office space

Revolut, the company that is looking to build a financial super app, has used bitcoin to pay for its largest office space in Dallas, Texas to the flexible workspace provider WeWork.

<