Robinhood introduced on Thursday it will give novice investors access to preliminary public providing shares, a transfer in its quest to “democratize” retail investing.
“We’re starting to roll out IPO Access, a new product that will give you the opportunity to buy shares of companies at their IPO price, before trading on public exchanges. With IPO Access, you can now participate in upcoming IPOs with no account minimums,” Robinhood mentioned in a blog post on Thursday.
The Silicon Valley on-line dealer mentioned it will roll out the investing platform in phases for customers of its buying and selling app.
The transfer, if broadly adopted in inventory market listings, could be one other disruptive effort by Silicon Valley Tech firms to curtail the iron grip of Wall Street’s greatest establishments on market flotations.
IPO shares have traditionally been put aside for Wall Street’s institutional investors or high-net value people. “Most IPO shares typically go to institutions or wealthier investors. With IPO Access, everyday investors at Robinhood will have the chance to get in at the IPO price,” Robinhood mentioned in a weblog put up.
Robinhood mentioned it will work with Wall Street funding banks to get allocations for retail investors, including that the new platform will be accessible to all prospects, with none account restrict restrictions.
“We’re constantly working to provide a more informative and empowering investing experience” the corporate mentioned in a earlier blogpost.
It is unclear if Robinhood prospects will find a way to spend money on the net brokerage app’s pending IPO. The firm is anticipated to go public within the first half of 2021 and has filed confidentially with the SEC.
Earlier in March, on-line finance start-up Social Finance (SoFi) additionally mentioned it could enable retail investors to purchase into IPOs.
Unlike Robinhood, Sofi will be an underwriter for its provided IPOs. Robinhood will get an allocation of shares by partnering with funding banks, however will not be an underwriter.