Here’s what we learned from the Robinhood IPO roadshow
- Robinhood is interested in expanding into IRA and Roth IRA accounts.
- The financial services firm wants to diversity its sources of revenue.
- Robinhood will list on Nasdaq under ticker symbol "HOOD" on Thursday.
Robinhood Markets Inc is set to go public later this week on Thursday. The financial services firm will list its shares on the Nasdaq Stock Exchange under the ticker symbol “HOOD”, at a per-share price of $38 to $42.
Robinhood is targeting a valuation of $35 billion. Out of the 55 million shares on offer, up to 35% are reserved for retail investors.
Highlights from Robinhood’s IPO roadshow
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Ahead of the IPO, CEO Vladimir Tenev acknowledged the demand for retirement accounts on the virtual roadshow and said that the “firm was interested in expanding into IRA and Roth IRA accounts”. Robinhood is also working on wallets for cryptocurrency users that would let them hold their own digital assets, reported CNBC’s Kate Rooney on Monday.
“In the preliminary Q2 results, crypto made up a bigger share of Robinhood’s trading revenue. Robinhood’s growth has been tied to many viral events like GameStop, Dogecoin, SNL, etc. But if bitcoin volatility slows down, that often means trading volatility slows down; it would probably not be a good thing for Robinhood,” she added.
The Menlo Park-based company’s management reiterated on the IPO roadshow that Robinhood was not a brokerage firm but a “single money app”. Commenting on the future of retail trading, CFO Jason Warnick said:
“We think retail investing is a trend that’s here to stay. If you look at the data, the growth in retail actually started years before we launched. Our contribution has really been to accelerate the process.”
Robinhood wants to diversify its sources of revenue
According to CEO Tenev, Robinhood also wants to diversify its sources of revenue beyond payment for order flow. To that end, the U.S. firm will explore opportunities in spending and savings products.
“Robinhood is most widely known as a trading app. Other fintech companies that already do IRAs, they’re not valued nearly as high as Robinhood. They’ve grown a lot more slowly and less extremely than Robinhood. So, Robinhood’s valuation is really all about the trading,” Rooney commented.