Banking

Robinhood IPO Seeks $2.2 Billion, Fueled By New Generation Of Investors

Stock-market trading app Robinhood Markets (HOOD) plans to raise $2.2 billion with an initial public offering that would place a valuation of about $35 billion on the company. The Robinhood IPO could launch by the end of next week.




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The company plans to sell 55 million shares in a range of $38 to $42. Salesforce.com (CRM), a new investor, has indicated an interest to purchase up to $150 million worth of shares, or about 7% of the deal, according to the Robinhood IPO filing.

The company also expects the underwriters to reserve 20%-to-35% of Class A common stock, which will be allocated for sale to Robinhood customers through its app.

It’s one of the most anticipated IPOs of the year.

The company is known for pioneering commission-free stock trading with no account minimums. The platform allows users to make unlimited commission-free trades in stocks, exchange-traded funds, options and cryptocurrencies.

The app is popular among young and first-time investors and traders. Millions of young investors flocked to Robinhood during the meme-stocks trading mania like that of GameStop (GME). Excitement around cryptocurrencies like Bitcoin also fueled interest in the app.

It had 18 million funded accounts at the end of the first quarter. More than half of the customers funding accounts said Robinhood was their first brokerage account, the company said. It has $81 billion in assets under control.

The company says it expects to report second-quarter revenue between $546 million and $574 million. That’s up 129% from the year-ago period. However, Robinhood estimates a net loss in the range of $487 million to $537 million in the second quarter, compared with a small profit in the second quarter in 2020.

Robinhood IPO: The Next Generation Of Investors

“While we are only six years into our journey we have already seen profound transformations in how people think about their money,” Chief Executive Vlad Tenev and Chief Creative Officer Baiju Bhatt said in written remarks with the Robinhood IPO filing.

“The next generation of investors is younger and more diverse than ever before and finance is now as culturally relevant as music and the arts,” the executives said.

The Robinhood IPO will trade on the Nasdaq under the ticker HOOD. The lead underwriters are Goldman Sachs, JPMorgan and Barclays.

Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.

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