Robinhood Mulls Platform for Buying Into IPOs, Reuters Says

(Bloomberg) -- Robinhood Markets is building technology that would allow customers to buy into initial public offerings, including its own, Reuters reported Thursday.

The online brokerage is readying its own IPO this year, and has weighed selling shares directly to its clients, Bloomberg News reported in January.

Allowing customers to buy into the IPOs of other companies, however, would require negotiation with those businesses and other Wall Street firms, and approval from regulators, Reuters reported.

A Robinhood spokeswoman declined to comment.

The firm said earlier this week that it had filed confidentially for its IPO.

Robinhood stands out in the industry for its focus on small-dollar and novice investors. The average account size is about $5,000, Chief Executive Officer Vlad Tenev told Congress last month. Such retail customers typically aren’t included in pre-IPO investment rounds and have to wait until after stocks begin trading before they can buy them.

Robinhood’s popularity has surged during the past year as pandemic-induced lockdowns kept people at home and pushed some young users to experiment with commission-free trading. Lawmakers and regulators have focused more attention on the trading platform as its reach has grown.

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