Robinhood IPO shares are now open for access to amateur investors as the company’s latest move in democratizing retail investing.
The firm is a stock trading application set off to be a household name and media mainstream in 2020. It provides a commission-free trading platform for stocks, exchange-traded funds, options, American depository receipts, and cryptocurrencies.
The company generates revenue from a wide range of sources, such as Gold membership, stock loans, and rebates from trading venues and market makers.
Meanwhile, an IPO is a company’s initial public offering of stock sales. Robinhood offers pre-IPO orders for a little selection of stocks. It won’t support pre-IPO bids for every firm that lists on the market.
These shares have historically been rejected by Wall Street’s institutional investors or high-net-worth traders. Retailers usually don’t have the means to buy into newly listed stocks until those shares start to trade on an exchange, which is usually after the shared price has spiked.
It is still murky if Robinhood’s clients will be able to invest in the firm’s pending IPO. The stock-trading app should go public in the first half of this year and has filed secrecy with the Securities and Exchange Commission (SEC). Even though the public offering date is not yet available, the IPO access should roll out to all aspiring clients for the next few weeks.
Robinhood won’t be a sponsor for firms that hit the public market. However, it will get an allocation of shares by affiliating with investment banks. This is the company’s latest move to provoke Wall Street.
Figs IPO Already Set, Robinhood’s First Investor
On Thursday, May 20, Figs IPO was submitted to SEC. This will be the first company to propose its share on the Robinhood app.
As Figs filed its S1 document to SEC, it said that the firm is currently expecting that there will be up to 1% shares of Class A common stock that will be offered to retail investors. This will go through Robinhood as its selling group constituent via its online brokerage platform.
According to the company they are aware of the risk of Robinhood’s first IPO. There may be risks with the use of the platform that neither can foresee. These risks include the use of social media by app users that they cannot control.
Meanwhile, using IPO Access, the stock trading app will appeal to buy shares at their initial listing price range. When the closing price is final, investors will be able to purchase, change, or even cancel.