After being roasted for his role in the January market and appearing before Congress in February, Robinhood is anxious to go public in March.
The No-Fee trading app for millennials is eyeing an initial public offering later this month and plans to conduct confidential IPO paperwork with the Securities and Exchange Commission in the coming days, according to a Bloomberg reports that cited anonymous sources (paywall).
It was widely reported that Robinhood hired Goldman Sachs to do its IPO last year. Goldman did not immediately respond to a request for comment.
After a funding round last September valued at $ 11.7 billion, Robinhood is hoping to convert some of the financing to equity. Bloomberg reported that the first lot would be exchanged at a $ 30 billion valuation or 30% discount to the IPO.
According to the report, the company has also considered selling shares directly in its IPO. The game could be a potential olive branch for day traders burning from the app’s clampdown on buying and selling other “meme stocks”.
Robinhood cracked down on its clearhouse appeal – a move that sparked outrage and accusations that the app was conspiring with Wall Street firms that pay Robinhood the right to execute their trades, claiming That they worked together to kill the frantic miniature squeeze.
“You here everyone who sees this hates his guts, don’t you?” Bartool Sports founder Dave Portnoy – who has become a hero for day traders during the epidemic – told Robinhood CEO Vlad Tenev in a February 24 interview. “You killed the little man.”
Tenev acknowledged to members of Congress that mistakes had occurred during his testimony a week earlier, but defended his decision to stop users from trading meme shares, while he defended his capital requirements in the chaos of the Reddit rally. Demanded $ 3.4 billion in emergency liquidity to complete.
As a public company, Robinhood would have access to the kind of liquidity in the market that could have eased that situation.
But in addition to the Reddit Rally fiasco, Robinhood’s most recent regulatory filing revealed that the company could pay more than $ 26 million in regulatory fines for several of the app’s service functions in 2020 that allowed customers to fume through a help line And left unable to communicate. One of which is a violation of the Financial Industry Regulatory Authority rule.
The company also admitted that in 2020 FInra and the SEC are investigating their role in the suicide of an amateur options trader who blamed their decision on a loss on their Robinhood account, in which they left for their family Was.
In December, Robinhood paid players $ 65 million to settle fees that it was misleading users about how it was making money and failed to deliver the best execution on trades.
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