The latest updates from Robinhood’s IPO: broker targets $35B valuation

By: Ruchi Gupta
Ruchi Gupta
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on Jul 19, 2021
  • Expectations are running high on the Robinhood IPO.
  • The company aims to sell 55 million shares through the IPO for a price range of $38 to $42 per share.
  • Through the IPO, the company is aiming to raise as much as $2.3 billion.

Robinhood released an amended SEC on Monday that reveals new details on the much anticipated initial public offering. According to the statement, the company is looking to raise $2.3 billion through the sale of 55 million shares at a price of $38 to $42 per share. This implies the stock and crypto broker could be worth as much as $35 billion, up from a valuation of $11.7 billion as of last September, CNBC reported.

Financial and business details

Robinhood’s regulatory filing reveals some key financial and user metrics. Robinhood boasts as many as 22.5 million funded accounts with a bank., up from 18 million in the first quarter of 2021. The filing also notes the company expects to see second-quarter 2021 revenue of $546 million to $574 million which implies an increase of 129% from the same period last year.

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But, the company places its net income loss to be at least $487 million and up to $537 million for the second quarter. According to CNBC, Robinhood is also modeling for both stock and crypto trading activity to slow down in the third quarter

Retail interest

According to CNBC sources, Robinhood will make its public debut by the end of next week. Until then, the company plans on live streaming part of its traditional IPO roadshow for retail investors. On Saturday, Robinhood CEO and co-founder Vladimir Tenev will host a management presentation along with a live Q&A session. This is part of the company’s prior plans to reserve one-third of its new shares to be purchased exclusively by its retail clients.

In fact, Robinhood investors can reserve shares as of Monday under the ticker “HOOD”. But will retail investors want to own Robinhood shares at a time when the stock market sold off sharply on Monday while cryptocurrencies continue to struggle? According to CNBC, the stock could trade like a “high-risk or venture capital risk-on asset” amid a newsflow cycle that is not supportive of trading activity.

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