Robinhood Markets, the zero-commission investment app, has set terms for its much anticipated initial public offering.
Robinhood said on 19 July that it would offer 55 million shares at $38 to $42 each. It will trade under the ticker HOOD on the Nasdaq market.
At $42 a share, Robinhood could be valued at $35bn.
Founded in 2013, Robinhood offers commission-free trading on stocks and other investments. The Menlo Park, California company sends customer orders to market makers like Citadel Securities, Virtu Americas, and G1X Execution services. It employed 1,281 people in 2020.
Robinhood competes against brokers like Charles Schwab, TD Ameritrade (owned by Schwab), Fidelity Investments, E*Trade, which has been acquired by Morgan Stanley, and Interactive Brokers Group. These firms have eliminated online trading commissions as well.
The trading start-up is trying to make IPOs accessible for retail investors. Customers of Robinhood, who take part in its IPO Access, can buy shares of certain offerings. The company is setting aside as much as 35% of its shares in the IPO for sale to Robinhood customers through its IPO Access feature, the prospectus said.
In addition to Robinhood shares, customers also have a chance to buy stock in Outbrain, the adtech company, and Duolingo, the language learning website and app, are now available on IPO Access, the Robinhood website said. It is unclear how much of each company’s shares are available to Robinhood’s customers.
The prospectus lists 17 investment banks working on the deal. Goldman Sachs and JPMorgan are the lead underwriters on the deal.
Write to Luisa Beltran at [email protected]
This article was published by Dow Jones Newswires