Robinhood aims for $35B valuation in IPO

Robinhood aims for $35B valuation in IPO
The company at the center of this year's meme stock frenzy will market 55 million shares for $38 to $42 each, according to a filing with the SEC.
JUL 19, 2021
By  Bloomberg

Robinhood Markets Inc. is seeking a valuation of $35 billion in its initial public offering, just short of the highest projections by analysts, as the free trading app advances toward a debut likely to draw in buyers from its own novice investor base.

The company at the center of this year’s meme stock frenzy will market 55 million shares for $38 to $42 each, according to a filing Monday with the Securities and Exchange Commission. In March, Bloomberg Intelligence estimated that Robinhood could be valued in a range of $13 billion to $40 billion.

Robinhood aims to raise more than $2 billion in its public debut, planned for later this summer. With the price range set, it will now proceed with its IPO roadshow and will start meeting with investors this week. Its valuation could still change depending on demand from investors.

As a publicly traded brokerage, Robinhood will join the ranks of Coinbase Global Inc., a cryptocurrency trading platform that debuted this year and is currently worth almost $47 billion, and industry heavyweight Charles Schwab Corp., which bought competitor TD Ameritrade last year and has a market value of about $130 billion.

With plans to raise more than $2.2 billion, Robinhood’s IPO would be the fifth-biggest on a U.S. exchange in 2021. This year has already set an all-time record with 648 companies raising a total of about $218 billion, according to data compiled by Bloomberg.

Robinhood caught on during the coronavirus pandemic as homebound young people turned to online trading to pass the time and make money. Its monthly active users have more than doubled in the past year, with 17.7 million as of the first quarter, up from 8.6 million in the same period in 2020.

The Menlo Park, California-based company has said it will reserve 20% to 35% of its Class A shares for its customers.

valuation
INCREASED SCRUTINY

Robinhood’s increased popularity has led to scrutiny from politicians and regulators, who are focused on the so-called gamification of trading and its role in the meme-stock phenomenon. At the height of the volatile late January frenzy over stocks like GameStop Corp., the company had to raise billions of dollars from its backers.

In June, the Financial Industry Regulatory Authority imposed a nearly $70 million fine on Robinhood, a record for the watchdog. Finra alleged Robinhood misled its customers about margin trading and lapsed in its oversight of technology and approvals for options traders. Robinhood neither admitted nor denied the claims.

Robinhood announced in March that it had filed confidentially to go public. It disclosed its financials for the first time in its July 1 public filing, which showed the company generated net income of $7.45 million on net revenue of $959 million in 2020, compared with a loss of $107 million on $278 million the previous year.

Robinhood’s top shareholders are venture firms DST Global, Index Ventures, New Enterprise Associates and Ribbit Capital. Each group owns more than 5% of its stock leading into the offering.

Goldman Sachs Group Inc. and JPMorgan Chase & Co. are leading Robinhood’s offering. Its shares are expected to trade on the Nasdaq Stock Market under the symbol HOOD.

Latest News

Advisor moves: LPL welcomes $750M Osaic team, Raymond James recruits Wells Fargo duo in New York
Advisor moves: LPL welcomes $750M Osaic team, Raymond James recruits Wells Fargo duo in New York

Elsewhere in Utah, Raymond James also welcomed another experienced advisor from D.A. Davidson.

UBS loses arbitration battle in fiduciary fight over foundation funds
UBS loses arbitration battle in fiduciary fight over foundation funds

A federal appeals court says UBS can’t force arbitration in a trustee lawsuit over alleged fiduciary breaches involving millions in charitable assets.

RIA moves: NorthRock adds $800M Parkside Advisors, NFP acquires Levine Group in Tennessee
RIA moves: NorthRock adds $800M Parkside Advisors, NFP acquires Levine Group in Tennessee

NorthRock Partners' second deal of 2025 expands its Bay Area presence with a planning practice for tech professionals, entrepreneurs, and business owners.

Three easy ways to boost your firm’s impact this summer
Three easy ways to boost your firm’s impact this summer

Rather than big projects and ambitious revamps, a few small but consequential tweaks could make all the difference while still leaving time for well-deserved days off.

Hightower taps Osaic alum Scott Hadley as first chief advisory officer, expands C-suite
Hightower taps Osaic alum Scott Hadley as first chief advisory officer, expands C-suite

Hadley, whose time at Goldman included working with newly appointed CEO Larry Restieri, will lead the firm's efforts at advisor engagement, growth initiatives, and practice management support.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.