Online brokerage Robinhood confidentially files for US IPO

LONDON: Robinhood Markets, the online brokerage at the heart of the historic retail trading frenzy that gripped Wall Street this year, has confidentially submitted plans to regulators for a US initial public offering, the company disclosed on Tuesday (Mar 23).

The number of shares to be offered and the price range have not yet been determined, the company said in a blog post.

Reuters reported in December that Robinhood had picked Goldman Sachs Group to lead preparations for a stock market flotation.

Robinhood had considered going public through a direct listing in the weeks leading up to the filing, people familiar with the matter said.

In a direct listing, a company does not sell any shares in advance of its market debut, as is the case with IPOs.

Menlo Park, California-based Robinhood was founded in 2013 by Stanford University roommates Vladimir Tenev and Baiju Bhatt. The company's platform allows users to make unlimited commission-free trades in stocks, exchange-traded funds, options and cryptocurrencies.

Robinhood, which has become hugely popular with young investors for its easy-to-use interface, faced criticism after it was forced to curb trading in certain stocks during this year's social-media fuelled retail frenzy due to a 10-fold rise in deposit requirements at its clearinghouse.

It is currently being probed by US regulators over its temporary trading curbs on the so-called "meme stocks". Robinhood has set aside US$26.6 million for a potential settlement around trading outages in March 2020, as well as its options trading policies.

The company also raised US$3.4 billion in emergency funds after its finances were strained due to the massive jump in retail trading.

The funding rounds were led by Ribbit Capital and included existing investors ICONIQ, Andreessen Horowitz, Sequoia Capital, Index Ventures and New Enterprise Associates. The funding valued Robinhood at around US$30 billion, according to people familiar with matter.