Robinhood publicly files its long-awaited IPO documents revealing staggering growth

Vlad Tenev, left, and Baiju Bhatt pose at company headquarters in Palo Alto, CA. Photo: Robinhood via Inc.
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Silicon Valley on-line dealer Robinhood unveiled paperwork on Thursday for its flotation on the Nasdaq inventory market beneath the ticker image HOOD.

The controversial investing app which was on the heart of Wall Street’s latest retail buying and selling frenzy shocked buyers by enabling customers to commerce shares and ETFs without cost on its cellular app.

Founded in 2013 by Stanford University roommates Vlad Tenev and Baiju Bhattin, Robinhood turned extra common final yr as newbie investing surged amid the coronavirus pandemic.

In December, Reuters reported that the app had picked Goldman Sachs Group Inc to steer preparations for an IPO, which might worth it at greater than $20 billion.

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In the papers filed on Thursday, Robinhood disclosed it had 18.5 million funded accounts and $80 billion in buyer belongings as of March 31, greater than double the prior years. Over 50% of the customers are first-time buyers, and the founders mentioned they plan to proceed to make monetary investing extra accessible.

“We’d rather serve many small customers than a few large ones, and, while our competitors strive to go further ‘upmarket,’ we continue to see opportunity in serving those left behind, including underbanked customers, not just in the United States but all over the world,” they mentioned in a letter to shareholders.

Robinhood makes cash by means of a observe generally known as “payment for order flow,” by which retail brokers route commerce requests to different companies to execute in change for a fee. Last yr, Robinhood derived 75% of its complete income from cost for order circulate and transaction rebates.

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Robinhood was fined $65M last year by the U.S Securities and Exchange Commission for deceptive prospects about the way it makes cash

“One of Robinhood’s selling points to customers was that trading was ‘commission free,’ but due in large part to its unusually high payment for order flow rates, Robinhood customers’ orders were executed at prices that were inferior to other brokers’ prices,” in response to a statement by SEC.

Thursday’s submitting is among the public’s first complete seems at Robinhood’s financials. In 2020, its income grew 245% to hit $959 million, whereas it reversed losses to submit a $6.3 million revenue. However, the primary quarter of 2021 noticed a $1.4 billion loss, in response to Business Insider.