In a SEC filing, Robinhood revealed it is hoping to get a market valuation of $35 billion in its initial public offering. The stock trading app is releasing 55 million shares which are expected to be valued at between $38 and $42 per share. Depending on the actual value of the sold shares, this will raise to $2.3 billion.
The new valuation of $35 billion is an increase from the last valuation of $11.7 billion. The previous valuation in September 2020 was private, compared to the latest valuation which will be a public one.
Robinhood is expected to trade on the NASDAQ and will have the symbol HOOD in place. In its latest filings, it has released many updated figures. It has been revealed that the firm currently has 22.5 million accounts that have used a bank account when signing up. This is an increase of 4.5 million when compared to the last figures from March 2021.
It has also shown revenue increases in several different metrics. Compared to the 2020 second quarter revenues, the 2021 second quarter revenues show an increase of more than 100%. This is an increase from $244 million in 2020 to $544 million in 2021.
This is also a revenue increase from the first quarter of 2021 when Robinhood had revenue of $522 million. Despite these revenue increases, net profits have fallen in the second quarter of 2021 compared to the second quarter of 2020.
Robinhood had net profits of $537 million during the second quarter of 2020 compared to $487 million for the second quarter of 2021. This could be attributed to increased expenses from the attempts at expansion from Robinhood.
The trading app’s stated aims are to allow anyone access to investing. Many young people use Robinhood to trade and the app saw a surge of young users during the GameStop trading mania event that took place earlier this year.
The IPO is expected to increase the value of the company significantly.
Several risk factors have impacted the company including the growing regulatory scrutiny and technological issues, especially the system-wide outages around the meme stock frenzy. In June Robinhood saw its plans to go public this month slowed down due to going back-and-forth with the SEC.
Robinhood was recently ordered to pay a total of $70 million in penalties, the largest FINRA penalty in history for “systemic supervisory failures” and giving investors “false or misleading information.”
