Robinhood IPO seeks $ 35 billion

Robinhood, the very popular scholarship app that made it easy to throw fistfuls of money on memes stocks while on occasion locking those users out of trades on a whim, is ready to cash it big.

According to a updated flyer On Monday, the company is heading towards an initial public offering aimed at a price target of $ 38-42 per share, which would raise billions of investors for a valuation of $ 27-35 billion. CNN Business reported this would make Robinhood worth more than two-thirds of the companies in the S&P 500 and place it in the vicinity of companies like Yum Brands (operator of KFC, Pizza Hut, Taco Bell and other restaurants) or HP.

Unlike many tech companies that attempt explosive IPOs, Robinhood is already profitable, barely above even on $ 959 million in revenue in 2020. Co-founders Vlad Tenev and Baiju Bhatt plan to sell around 2.6 million shares; CNN Business wrote that the IPO would ultimately result in Tenev controlling 7.9% of the outstanding shares and 26.2% of the voting rights, while Bhatt would keep the same amount of shares and 39% of the rights. to vote.

The IPO is imminently expected and public trading in Robinhood’s shares could begin on the Nasdaq by the end of next week, according to the. New York Times.

Robinhood may generate revenue, but it’s also under regulatory scrutiny and, last year, infuriated large swathes of its user base. On several occasions, Robinhood has failures suffered that prevented users from making transactions, and others occasions, he has prohibited trades in some hot broths or cryptocurrencies for periods of time. This resulted in the loss of large sums of money for some users, and some of them accused Robinhood of giving in to outside pressure from hedge funds to manipulate the market and protect the big boys. losses when the volume of transactions on the application threatens their interests.

Users have deposited hundreds Federal Trade Commission complaints against Robinhood, saying the company’s customer support teams are worthless and don’t act quickly to help users screwed up by technical issues or business downtime. The Financial Industry Regulatory Authority and the Securities and Exchange Commission both slapped him with fines for deceiving clients; the SEC is also be wary of the company more generally and can target one of its basic practices, payment for order flow. According to Bloomberg, Robinhood rushed to hire former senior regulators in what looks like an effort to iron out the compliance issues it has put under the rug without changing its business model, including some very unusual work. $ 30 million for former SEC commissioner Dan Gallagher.