Robinhood Files Paperwork for Planned Initial Public Offering
One of the largest, most popular, and often controversial FinTechs is apparently getting ready to go public. This week, Robinhood announced that it had confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission (SEC). While this filing confirms the company’s eventual plans for an initial public offering, the SEC will need to complete a review process first. In turn, the number of shares to be offered nor a price range for said shares have been revealed yet.
Robinhood’s intentions to become a publicly-traded company date back to at least 2018 when the company brought on Jason Warnick to serve as its Chief Financial Officer. Just prior to that hire, co-CEO Baiju Bhatt told TechCrunch, “Being a public company closely aligns with our mission. Not in the immediate term, but it’s something we’re thinking about.”
However, while this development has long been expected, the timing of the filing has raised some eyebrows. Earlier this year, amid a surge of trading as part of a “short squeeze,” Robinhood temporarily limited transactions involving GameStop and several other stocks. More specifically, the company temporarily disabled the ability to buy these stocks and, instead, only allowed investors to exit their positions. This decision has not only been a source of customer outrage and class-action lawsuits but has also led to scrutiny from Capitol Hill.
Despite the drubbing Robinhood has received in the press, the FinTech has continued to raise massive amounts of money over the past year. In addition to a two-part Series G totaling $660 million last summer, the company took in a reported $3.4 billion from venture firms between January and February. To date, the company has raised a $5.6 billion and is valued at upwards of $12 billion.
Incidentally, Robinhood’s announcement comes as two competitors have recently revealed public offering plans. Earlier this month, eToro announced it would go public via a special purpose acquisition company (SPAC) merger. Meanwhile, SoFi — which offers an investment platform in addition to lending products, cash management accounts, a credit card, and more — is also taking the SPAC route. These deals value the FinTechs at $10.4 billion and $9 billion respectively.
Given Robinhood’s recent incidents and often complicated relationship with Wall Street, it will certainly be interesting to see how the company’s IPO might fare. Of course, one might hope that retail investors that use the platform to trade stocks would also be interested in owning a piece of the company themselves. Ahead of seeing Robinhood hit the markets, though, there are still many bridges to be crossed. As a result, we may need to wait and see what news emerges as the company continues to pursue its long-time vision.