That comes on the heels of revelations about other regulatory investigations. Robinhood said it was cooperating with the inquiry. On Tuesday, the company reported that, in addition to the examination of employee meme stock trades, the Financial Industry Regulatory Authority is investigating the fact that neither Tenev nor Chief Creative Officer Baiju Bhatt is registered with the watchdog. Through Robinhood’s app, however, an individual investor can request to buy pre-IPO shares by tapping a green button that says “I’m interested.” Robinhood will then randomly distribute the retail allotment to those clients.īeyond its client base, Robinhood is also walking a tightrope with U.S. Typically, hedge funds and large money managers benefit from buying shares ahead of an IPO, while retail investors wait until after the company debuts, potentially missing out on any initial rally. Although some trades happened in line with the current target, according to people familiar with the matter, other transactions were around $55 a share and sometimes even higher, one of the people said.Ī spokesperson for Robinhood declined to comment.īased in Menlo Park, Calif., Robinhood is casting its own IPO as a step to further its ambitions to provide small-time investors access to public offerings this year, starting with medical scrubs maker Figs Inc. Robinhood’s marketed price range fell short of where it was trading in recent months in the private markets.
“If Robinhood’s successful and they go public, and it looks like they’re going to trade at this multiple, now I know how much this next business that’s very similar might be worth,” White said. Venture capital investors probably will watch closely how it all unfolds, he said. At the same time, keeping the offering accessible and attractive to that large retail base will be an important consideration for Robinhood to make its IPO a hit, said Josh White, an assistant professor of finance at Vanderbilt University.