According to Reuters, the leading stock-trading app, Robinhood, has appointed Goldman Sachs to lead its initial public offering (IPO) next year. The IPO aims at assessing the fin-tech company at over $20 billion. The IPO will launch in 2021, depending on the market conditions. However, Robinhood raised $11.7 billion in its latest private fundraising round in September. The increased valuation emphasizes the extension of its platform.
Robinhood’s investors include venture capital firms like Sequoia, Andreessen Horowitz, and Ribbit Capital. The celebrity investors include rapper Snoop Dogg and actor Jared Leto. Founded in 2013 by Baiju Bhatt and Vladimir Tenev, it intends to democratize finance. The platform enables users to make extensive commission-free trades in stocks, exchange-traded funds, options, and cryptocurrencies. However, the IPO plans aren’t brand-new. Nevertheless, former Robinhood CEO Baiju Bhatt stated in 2018 that the company was looking for an ultimate IPO. The plans might kickstart soon with Goldman Sachs.
Robinhood’s set of challenges in the digital financial market
Robinhood houses approximately 13 million users. However, this milestone has faced various challenges. It includes users being affected by trading dryness throughout the US presidential election and hackers obtaining approximately 2,000 users’ accounts. Authorities have cited Robinhood as gamifying funding to the extent where innocent clients can cause themselves ample financial outrage. At the peak in June, the challenges were when a young options trader took his own life after holding a remarkably large negative portfolio value that was not contemplative of his actual balance.
Some investors have also blamed Robinhood’s amateur traders for skewing the market. However, a recent study discovered that Robinhood’s traders had little influence. The company has also suffered investigation from federal regulators. In 2019, Robinhood began checking and saving products, hawking them as fully insured accounts with sky-high interest rates. Nevertheless, that information was faulty. Recently, Robinhood fell victim to the inspection by Securities and Exchange Commission and the Financial Industry Regulatory Authority for its administration of a day-long blackout in March and definitely by the SEC in an inquiry into alleged defaulters to accurately reveal its sales with high-speed traders.
Robinhood’s investors include venture capital firms like Sequoia, Andreessen Horowitz, and Ribbit Capital. The celebrity investors include rapper Snoop Dogg and actor Jared Leto. Founded in 2013 by Baiju Bhatt and Vladimir Tenev, it intends to democratize finance. The platform enables users to make extensive commission-free trades in stocks, exchange-traded funds, options, and cryptocurrencies. However, the IPO plans aren’t brand-new. Nevertheless, former Robinhood CEO Baiju Bhatt stated in 2018 that the company was looking for an ultimate IPO. The plans might kickstart soon with Goldman Sachs.
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