According to reports, people familiar with the matter revealed that AOL brokerage Robinhood had just secretly submitted the IPO documents, and this news was subsequently officially confirmed. Earlier this month, a person familiar with the matter revealed that Robinhood decided to IPO on the Nasdaq, and Goldman Sachs will provide consulting services for it.
Robinhood’s main venture capital supporters include D1 Partners, Sequoia, Kleiner Perkins, and Google’s parent company Alphabet’s venture capital firm GV.
As the epidemic attracted many new retail investors to join the stock market, Robinhood was caught up in the turmoil early this year due to the “retail investors squeezing out Wall Street” incident. According to calculations by JMP Securities, Robinhood added 3 million users in the incident triggered by the social networking site Reddit at that time.
That incident was caused by the large-scale retail buying power of Wall Street’s most concentrated short game Inn (GameStop), while Robinhood then decided to limit the stock transaction, giving rise to the dispute. U.S. legislators held a hearing to understand the reasons behind the incident and discuss whether new regulatory policies should be formulated. Robinhood CEO Vlad Tenev and other company executives testified at the hearing.
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Robinhood was founded in 2013 by two roommates from Stanford University, Tenif and Baiju Bhatt. They first entered the financial industry by selling trading software to hedge funds, and later founded Robinhood, which developed a way to help retail investors buy and sell stocks with petty cash.
Because Robinhood reduces the difficulty of stock trading, it is quite popular among young people. Customers can quickly bind accounts, search for stocks, and then complete the purchase by swiping on the phone screen.
Robinhood also allows users to buy odd shares. For example, users may not have to spend $660 to purchase a complete share of Tesla stock, but instead can invest $5, $10, or $100 to purchase a portion of Tesla stock.
And one of the company’s most important moves is to enter the cryptocurrency industry in early 2018. Users can buy Bitcoin, Ethereum and many other digital cryptocurrencies on the app just like buying and selling stocks.
Prior to the “retail investors squeezing out Wall Street” earlier this year, Robinhood had completed a round of financing last year at a valuation of approximately US$12 billion. In response to the liquidity contraction, the company also raised $1 billion in February.
Although the latest situation may have an impact on valuations, the public market’s thirst for technology stocks may cause investors to put their concerns aside. The cryptocurrency trading market Coinbase will soon be listed, and has received a valuation of up to 100 billion U.S. dollars in recent private market transactions.
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