Robinhood will list on the NASDAQ tonight after a US$32 billion IPO
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Robinhood priced its IPO at $US38 ($AU52) on Wednesday, valuing the online brokerage app popular with retail investors at roughly US$32 ($43) billion. The Wall Street Journal first reported the pricing.
The Robinhood IPO price came in at the bottom end of the price range it had initially been targeting during its roadshow of US$38 ($52) to US$42 ($57) per share.
Robinhood last raised US$3.4 ($5) billion earlier this year, with shares trading on private secondary markets at a valuation around US$40 ($54) billion.
The company has seen explosive growth amid the COVID-19 pandemic and government stimulus checks, with millions of Americans becoming first time investors in the stock market. Robinhood has more than 18 million accounts and 17.7 million active monthly users.
While the brokerage firm is not yet profitable, the company saw revenue grow 245% to nearly US$1 ($1) billion in 2020.
That revenue growth accelerated in the first quarter of 2021, surging 309% to US$522 ($708) million, according to its S-1 filed with the SEC last month.
Much of that growth is coming from options and crypto trading, two highly speculative areas of markets than often lead to either big losses or massive fortunes.
Unique to the Robinhood IPO is the company’s decision to allocate up to 35% of its IPO shares to users of its app. Retail investors are often restricted from investing in IPOs at the pricing afforded to institutional investors.
While the Robinhood IPO represents a big milestone for the company, there is still a long way to go before co-founders Vlad Tenev and Baiju Bhatt can cash in on their hefty compensation awards.
Both founders will be awarded US$1 ($1.4) billion if Robinhood’s stock price reaches US$101.50 ($138) by 2025.
Robinhood is set to trade on the Nasdaq index under the symbol “HOOD” beginning on Thursday.
This article first appeared on Business Insider Australia, Australia’s most popular business news website. Read the original article here.