Robinhood, the popular US share trading platform, is hoping to be valued at up to $35bn when it makes its stock market debut on the NASDAQ.
The group revealed in an updated prospectus yesterday that it aims to raise around $2.3bn by offering 55 million shares to investors. The shares will be priced between $38 to $42 each.
The listing is set to be one of the most hotly anticipated this year. Robinhood, launched in 2013 and headquartered in the heart of Silicon Valley, is hugely popular in the US largely thanks to offering zero commission on stock traders. As of 2021, it has over 31 million users.
Vladimir Tenev and Baiju Bhatt, Robinhood founders and chief executives, as well as chief financial officer Jason Warnick, will put over 2.6 million shares on the market. However, they will retain around two thirds of the voting power after the IPO.
The company’s filing also revealed the investment arm of Salesforce, the cloud-based software provider, is hoping to buy as much as $150 million worth of stock in the Robinhood IPO. Goldman Sachs and JP Morgan are the lead underwriters.
Robinhood said it will host a public event on 24th July in which it will present plans for its IPO and answer investor questions.
The share trading platform was initially founded by Tenev and Bhatt to ‘democratise finance for all’. It quickly gained popularity among millennials and is also widely used by ‘Generation Z’, with its users having a median age of 31.
The company was one of the pioneers of zero commission online trading of stocks and ETFs, as well as fractional shares. In recent years, the company has also added cryptocurrencies to its platform, following the same zero commission model.
It saw a huge growth in users at the start of the COVID pandemic as the markets took a dive. Robinhood reported a fourfold increase in first quarter revenues to $522 million in 2021, but the company hasn’t been without scandal.
The most notable controversy came when it halted trading in shares of GameStop and AMC, after members of the Reddit group Wallstreet Bets plotted to buy the shares in mass and force their value up to all time highs in reaction to investment banks shorting the stocks.
This forced Robinhood to raise $3.4billion in emergency funds after its finances were strained. It was heavily criticised by retailer traders who accused it of manipulating the market alongside large finance firms. It reached a $65 million settlement with the US Securities and Exchange Commission in 2020 over concerns that it misled customers.