Robinhood Confidentially Submits Its Drafts to US SEC for Its Proposed IPO

American financial services company Robinhood Markets Inc popularly known for offering commission-free trades of stocks and exchange-traded funds via a mobile app has confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission (SEC) regarding the upcoming initial public offering (IPO).

However, Robinhood has not yet determined the number of shares to be offered during the IPO. Moreover, Robinhood has not set the initial price for its common stock.

All that is expected now is for the SEC to complete the review process for the company to proceed with the next step. The company has not yet specified which exchange it will list its common shares, however, CNBC previously reported that the firm will use Nasdaq during its proposed IPO. Besides, it is not yet clear if the firm will go the direct listing route or the traditional IPO route.

Robinhood IPO and Its Market Outlook

Robinhood has been involved in different series of findings since its inception back on April 18, 2013. At the beginning of 2017, the firm raised $110 million at a $1.3 billion valuation led by Yuri Milner of DST Global, Greenoaks Capital, and Thrive Capital.

The following year, the company completed its Series D funding round and managed $363 million led by DST Global. As the coronavirus pandemic took shape earlier last year, the company reported that it had raised $280 million in venture funding at a pre-money valuation of $8.3 billion led by Sequoia Capital. Mid last year, the company announced a $200 million Series G funding round led by D1 Capital Partners.

The company has been a significant gateway used by most millennials to access the stock market through the mobile application. As of 2020, Robinhood reported that it had over 13 million users. By providing retail traders a chance to access the stock market, major market moves have previously been reported to have been orchestrated through the app.

Earlier this year, a group of retail traders from the Reddit social media platform combined forces to short squeeze GameStop Corp (NYSE: GME) stocks against hedge funds. Incidentally, the stock skyrocketed in a short period thus prompting the company to temporarily halt trading of the affected stocks.

Robinhood later found itself at loggerheads with the United States regulators over trading restrictions.

The company noted that it has put aside $26.6 million for possible settlements related to the stock trading outages earlier this year.