Crypto and stock trading app Robinhood is set to launch its IPO (Initial Public Offering) in a few weeks.
Bloomberg reports that the Robinhood IPO is expected to be released as early as next week with its S-1 filing with the Securities and Exchange Commission. The plans for the IPO release are reported to be at an advanced stage, however secondary details and its timing might still be susceptible to change.
The trading platform had sent a confidential registration statement on the Form S-1 with SEC back in March concerning its expected initial public offering of its common asset. Once the S-1 filings are released to the public, investors will be able to access the platform’s financial information. The platform has witnessed an increase in the number of users which have grown over 600% since the last quarter of 2020.
Expectations For The Success of Robinhood’s IPO
The highly anticipated release of the IPO of the Robinhood app is fueled by its increasing popularity among retail traders within the lockdown period. The Robinhood Markets’ popularity metamorphosed into a public crisis after the huge trading in meme stock assets including GameStop, AMC and Tesla that compelled the platform to withhold trading despite a crunch in liquidity. The happenings had led to a series of hearings in Congress to determine if the platform were collaborating with the meme stock owners, however, Robinhood CEO Vladimir Tenev denied the allegation.
The unsatisfied users and the general public heavily criticized the company for the decision to suspend the trading of certain stock assets within the critical period that involved assets like GameStop. Investors went further to accuse the platform of an unhealthy partnership with the big players.
The tumultuous period led Robinhood to kick-start a filing process for its initial public offering. It is expected that the launch of the app’s IPO will be successful.
FOX Business stipulates a potential value of $40 billion should the IPO be launched in June.
More SEC Policies to Affect Robinhood’s IPO
The United States Securities and Exchange have hinted earlier that Robinhood and other platforms might be set to follow new regulations.
The SEC Chairman Gary Gansler has said in a statement to the House Financial Services that the volatile movements in meme stock and other stocks have attracted the attention of SEC and that the agency is setting newer guidelines for trading applications to abide too.
Gansler noted that trading with most platforms has turned out to be more like a gaming experience without so much regard from the platform and investors about the critical decisions that they are taking. He further mentioned that the site outline of platforms should stop the promoting of certain stocks or virtual assets that have the likelihood of influencing novice traders to ignorantly hop into a project without proper research. Gansler also thinks that the government should as well set up a regulatory framework for trading platforms.
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