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Robinhood initial public offering seeks a $35 billion valuation

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Robinhood initial public offerings seek a $35 billion valuation

Shares will trade on the Nasdaq under the ticker symbol HOOD. 

Robinhood Markets Inc. is seeking a valuation of up to $35 billion as it prepares for one of the most-anticipated initial public offerings of the year. 

The company at the center of this year’s meme stock frenzy will market 55 million shares for $38 to $42 each. The IPO would raise about $2.3 billion at the high end of the range. 

Bloomberg Intelligence in March estimated that Robinhood could be valued in a range of $13 billion to $40 billion.

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.

Nearly 2.63 million shares being sold are owned by Robinhood’s founders and chief financial officer, and proceeds from those sales will not be awarded to the company. 

Robinhood, which allows users to trade U.S.-listed stocks, related options and American depositary receipts, as well as cryptocurrencies, saw business boom during the coronavirus pandemic as government stimulus checks and COVID-19 lockdowns gave Americans the chance to focus on their investments. 

The number of monthly active users of the app increased 106% year over year to 17.7 million at the end of the first quarter. The company has said it plans to reserve up to 30% of its IPO for its customers. 

Robinhood paid a record $70 million fine in June to settle Financial Industry Regulatory Authority allegations that the company misled investors about margin trading and was lax in its oversight of approvals for options traders. The company neither admitted nor denied wrongdoing. 

Total revenue in the three months ended March 31 soared 309% year over year to $522 million. The company booked a $1.4 billion loss, which included a $1.5 billion fair value adjustment to its convertible notes.

For 2020, Robinhood’s revenue surged 245% year over year to $959 million. Net income was $7 million, up from a $107 million loss the year prior.

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