Robinhood targets valuation of at least $ 40 billion when it IPO – .

Robinhood targets valuation of at least $ 40 billion when it IPO – .

Robinhood, the online brokerage firm associated with the rise of retail investor day trading, is targeting a valuation of $ 40 billion or more in its initial public offering, people familiar with the plans said, as the company released its fundraising prospectus on Thursday.

In a regulatory filing that gave a first glimpse of its financial performance, Robinhood said its revenue more than tripled to $ 959 million last year, from $ 278 million in 2019, and that its explosive growth s ‘was continued in the first quarter of this year.

The platform has more than doubled the number of registered users since the start of 2021 to 31 million, he said. Of those, 18 million were funded accounts at the end of the first quarter, up 151% from the end of 2020. It had revenue of $ 522 million in the first three months of the year, an increase of 309% compared to the same period. Year before.

The prospectus comes a day after US regulator Finra imposed its highest fine on the broker, a $ 70 million fine it said was for causing “widespread and significant harm” to its clients. The failures included technical issues on the platform during times of high volatility, Finra said.

An increase in trading in “memes stocks” such as GameStop forced the platform to halt trading in some securities in late January, in an incident that strained the brokerage’s finances. Robinhood rushed to get $ 3.5 billion from then-investors, a fundraiser that saw it register a loss of $ 1.4 billion for the quarter. It posted a net profit of $ 7 million for the full year of 2020.

The valuation of the IPO will be particularly important for investors who purchased convertible bonds issued in February, which will be converted into shares at a discount of at least 30 percent from the offer price. For the most senior debt holders, the conversion is capped at a valuation of around $ 30 billion, meaning that the higher the IPO price is above $ 43 billion, the higher the windfall. helping the business is important.

Robinhood’s rapid growth has been accompanied by increasing regulatory oversight, and Vlad Tenev, its co-founder and chief executive, has been called to testify before Congress about the January trade restrictions.

The prospectus said it had received subpoenas regarding the restrictions, and federal prosecutors executed a search warrant to obtain Tenev’s cell phone.

The company is also under investigation by the California Attorney General’s Office, the prospectus revealed, and has reserved at least $ 15 million in fines as part of a potential resolution of a lawsuit for New York State Department of Financial Services money laundering.


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