update 18 August 2021

Robinhood Sets Publicized IPO Pricing at the Bottom of Marketed Range

Robinhood stock trading app priced its initial public offering at the low end of its estimated range. The company targets to sell about 55 million shares at that range to raise over $2.3 billion. Robinhood plans to hit the markets on Thursday.

On Wednesday, Robinhood said that it would trade under the ticker HOOD. However, instead of selling the bulk of its shares to institutional investors like most IPOs, It is pricing its initial public offering up to 35% a share to its customer.

Potential customers planning to get into the IPO had little to say about the valuation. Still, they are excited about the idea of getting an opportunity to invest in the much-anticipated offering that could boom.

Over the past few days, customers have signed to get shares and determine whether they received any on Thursday.

About Robinhood

Robinhood is the third-largest brokerage derived from the overall funded accounts behind Fidelity and Charles Schwab, which purchased TD Ameritrade. The stock brokerage allows customers to trade stocks, options, ETFs, and cryptocurrencies with no commission.

The Silicon Valley institution has over 22 million users with accounts linked to their bank accounts. It is apportioning over a third of its shares to its users during its IPO, an unusually high amount that the company says signals its mission to empower ordinary investors. 

At the top end of the range, each Robinhood co-founder would own stakes worth about $2.8 billion. Coinbase, the world’s largest cryptocurrency exchange, went public a few months ago. The firm has an extensive diluted market capitalization of $65 billion. The apps are among the most popular places for consumers to purchase cryptocurrencies, which have surged in trading in 2021. 

Democratize Finance

Robinhood will not get returns from the sale of shares by the selling stockholders. Instead, the firm will use the net proceeds for capital expenditures and working capital. Additionally, it will fund its tax obligations related to the settlement of RSUs and general corporate purposes. Robinhood also plans to expand its hiring efforts to advance its employee base, thus increasing its customer support operations and satisfying its general capital needs.

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Robinhood Markets aims to democratize finance for everyone. The company allows the community to invest with no account minimums through Robinhood Financial LLC, trade crypto through Robinhood Crypto LLC, and gain knowledge investing through easy-to-understand educational content. In addition, Robinhood aims to be the most trusted and relevant money app globally.