Robinhood valued at $ 32 billion after selling shares in IPO at $ 38 per share

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Robinhood, whose stock trading app has gained popularity with retail investors, shares sold in its IPO at $ 38 a piece, valuing the company at around $ 32 billion.

Ahead of its Nasdaq debut on Thursday, Robinhood valued stocks at the low end of the $ 38 and $ 42 range. The company, which will trade under the symbol HOOD, sold 52.4 million shares, raising nearly $ 2 billion. Co-founders Vlad Tenev and Baiju Bhatt each sold around $ 50 million in stock.

Robinhood has become a central gateway to markets for young people and new investors. The app, which offers stock, cryptocurrency, and options trading, as well as cash management accounts, has seen record trading levels during the pandemic and amid the equity craze. even from early 2021.

Robinhood estimates it has 22.5 million funded accounts (those linked to a bank account) in the second quarter. This is an increase from 18 million in the first quarter of 2021, an increase of 151% over the previous year. The company was last valued in private markets at $ 11.7 billion in September.

Goldman Sachs and JPMorgan Chase are the main investment banks in the transaction. The underwriters will have the option to purchase an additional 5.5 million shares.

In its updated prospectus, Robinhood estimated second-quarter revenue of $ 546 million to $ 574 million, up from $ 244 million in the second quarter of 2020. First-quarter revenue jumped 309% to $ 522 million. of dollars against 128 million dollars the previous year.

However, Robinhood expects a net loss of $ 487 million to $ 537 million in the second quarter after making a profit in the same quarter last year.

Robinhood raised $ 331 million in payment for order flow – the money brokerage firms receive for directing transactions from clients to market makers – in the first quarter. Payment for order flows has come under scrutiny from regulators in 2021.

Options trading accounts for around 38% of revenue, while stocks and crypto account for 25% and 17% of revenue, respectively. But Robinhood warned that the brokerage could see a slowdown in its trading income and account growth as the retail boom cools.

Robinhood’s competitors include Fidelity, Charles Schwab, Interactive Brokers, and newer services like Webull and SoFi. Charles Schwab has a market cap of $ 130 billion and Interactive Brokers has a market valuation of $ 26 billion.

DST Global, Index Ventures, NEA and Ribbit Capital are some of Robinhood’s biggest investors.

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