Online brokerage Robinhood is looking for a valuation of up to $ 35 billion in its initial public offering, one of the most anticipated stock listings of the year.
Robinhood offers about 55 million shares of its Class A stock ranging between $ 38 and $ 42 while seeking to raise more than $ 2.3 billion, the company said in a presentation with the U.S. Securities and Exchange Commission. Monday. The founders and chief financial officer have proposed about 2.6 million shares
Thirty-five percent of the company’s IPO shares will be available to sales translators, the company said. Robinhood plans to list its stocks on the Nasdaq under the symbol “HOOD”.
Goldman Sachs, JPMorgan Chase and Citigroup are among the banks signing the deal.
The Bay Area-based broker has become synonymous with the recent growth in retail investments by day traders. Its registered users have doubled since the beginning of 2021 to 31m.
Robinhood’s total revenues will grow 245 percent in 2020 from a year ago to $ 959 million. It also reported a net income of $ 7 million, compared to a net loss of $ 107 million in 2019, according to the SEC filing. The company estimated it had 22.5 million financed accounts, which are tied to bank accounts, at the end of June, up from 18 million at the end of the first quarter.
Robinhood’s mission of “democratizing finance for all,” with no commissions and an easy-to-use interface, has charted a new demographic of young investors in the markets. The average age of users is 31, younger than those of rival American brokers such as Charles Schwab or TD Ameritrade. The company says more than half of its customers are first-time investors.
Robinhood, which offers both equity, derivatives and cryptocurrency trading, has also been under scrutiny by legislators and regulators as its popularity has grown. He has been criticized for practices such as “payment for order flow,” from which Robinhood derives most of its revenue, and gamifies by investing in an experience such as “casino”.
In late June, the U.S. Financial Industry Regulatory Authority charged a $ 70 million penalty against Robinhood for causing what it described as “widespread and significant harm” to the United States. customers.
The valuation of the IPO is of particular importance to investors who bought convertible notes issued in February, when Robinhood had to raise emergency funds to meet its housing compensation obligations during the height of the mania. trading GameStop.
These notes will be converted into equity with a discount of at least 30 percent to the offer price. For older debtholders, the conversion is limited to a valuation of about $ 30bn.