Commission-free stock trading app Robinhood said that it had confidentially filed for an initial public offering on Tuesday, apparently ready to capitalize on all of the positive buzz surrounding democratized finance.
After Bloomberg first reported the news, Robinhood confirmed in a statement that it had submitted its filing U.S. Securities and Exchange Commission. A person familiar with the plans reports that the company could go public as soon as late in the second quarter of 2021, and has selected NASDAQ as the venue for its listing.
The decision to file privately isn’t necessarily an uncommon strategy: Other big-name startups including Airbnb, Lyft, Slack and Palantir all opted to file confidentially, which buys companies a little time before opening up the books for the investors who then use those key financial details to project growth trajectory.
Robinhood, it’s worth noting, is having an absolute dumpster fire of a year so far, with one public relations disaster on top of another. The company alienated a core constituency after it unexpectedly halted trades on meme stocks like Gamestop in January; was hit with a high-profile lawsuit brought by the family of a 20-year-old trader who died by suicide after checking the balance of his trading account in February; and was publicly smeared by Michael Bolton in March.
As it turns out, though, that old thing about there not being any bad press is true: In tandem with its recent public missteps, interest in retail trading has soared for the digital brokerage, validating the company’s commission-free approach and its strategy to essentially gamify investing. Retail investing has also bloomed with particular ferocity in the shadow of the Covid-19 pandemic, with would-be traders turning to accessible brokerages like Robinhood as a salve for their anxieties about economic recovery and financial stability.
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With U.S. stocks trading near record highs and investors more eager than ever to sign away huge sums of money to SPACs — special purpose acquisition companies set up with the express purpose of assisting small private companies in acquiring capital before going public — it seems like the fervor around retail investing is unlikely to die down anytime soon. It seems like Robinhood is teed up for a hot IPO, so long as it plays its cards right and successfully avoids another major public meltdown. Honestly, how hard could that be?
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