After battling the Gamestop controversy, Robinhood has filed for a confidential initial public offering (IPO) with the SEC. This is considered by investors to be the most controversial and largest listing on the U.S markets. However, there is no current information concerning the number of shares or the price.
According to Bloomberg, Robinhood’s IPO will take place once the SEC approves the company’s registration statement. The company has hired Goldman Sachs, an investment bank, to lead the IPO. Robinhood is currently valued at more than $20 billion and has an initial valuation of $12 billion after a funding round late last year.
We have confidentially submitted our draft registration statement on Form S-1 with the SEC https://t.co/0p4QctvaIM
— VLAD (@vladtenev) March 23, 2021
The company’s listing, which will be on Nasdaq in the next few months comes amid lingering controversies. In January, the company halted the trading of “meme stocks” like GameStop and AMC on its platform. The company explained that the closure of the stocks was due to the collateral requirements from its clearinghouse.
Robinhood’s IPO Raises Controversy
Furthermore, the action to restrict the stocks trading came after their prices soared which resulted in a short squeeze, causing large hedge funds to lose money. Robinhood was also accused by lawmakers of encouraging the gamification of U.S. equity trading. However, many have criticized Robinhood for being hypocritical following its restriction of GameStop trading.
The zero-commission trading enjoyed by retail traders on the platform is among the draws of the company. According to a report, Robinhood’s IPO could be a boost for crypto due to its amazing trading features and cryptocurrency services.
The company also revealed in February that several regulatory bodies were looking into the company’s options trading process. However, the company revealed that it is in talks with a regulatory firm, Finra to settle on time.