Robinhood raised nearly $ 2 billion in its IPO, well below the $ 35 billion expected.
Robinhood is a free crypto stock and options exchange that raised nearly $ 2 billion in its initial public offering. A company whose value is more valuable than Nasdaq, for example, the IPO did not bring the company's expected valuation of $ 35 billion. Robinhood will start trading today and will trade under the ticker HOOD.
Robinhood missed its $ 35 billion goal
Free investment app Robinhood has successfully completed its IPO and raised nearly $ 2 billion. However, the company was not lucky to achieve its target of $ 35 billion, as its shares were trading at $ 38, which is below the proposed $ 40-42 range. The company allows users on the exchange to receive one third of the available shares before listing, which is unusual for these processes.
Although Robinhood was unable to meet its goals, its valuation was much higher than the previous round of funding, when the company reached $ 12 billion. The company is currently in the middle of its competitors, with a valuation higher than Interactive Brokers' $ 26 billion, but not as good as Charles Schwab's $ 130 billion.
Robinhood has leveraged the interest and growth of the stock and cryptocurrency markets in the first two quarters of this year, as well as its popularity as one of the first exchanges to enable zero-fee transactions to drive industry change. But some experts argue that such estimates are unacceptable in the long run.
Cryptocurrency business Robinhood
While Robinhood's main income comes from options trading, which accounts for 38%, the company's important income also comes from cryptocurrency-related transactions at 17%. This gave Robinhood an exponential growth. In a preliminary IPO prospectus filed with the US Securities and Exchange Commission, the company announced that there were $ 88 billion in customer transactions in the first quarter of this year. This suggests that Robinhood is accumulating about $ 12 billion in cryptocurrency for its users.
Robinhood и SEC
Robinhood's large-scale cryptocurrency trading business has caught the attention of regulators. According to people familiar with the case, the US Securities and Exchange Commission (SEC ) has postponed Robinhood's IPO due to concerns over how company policies would affect the way it does business. Robinhood is also currently gaining regulatory attention because its CEO Vlad Tenev has not received approval from Wall Street's regulator, FINRA. Regardless, Robinhood stated that Tenev does not need to register as he is the CEO of Robinhood Markets, not the CEO of its trading subsidiary Robinhood Financial.
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