Business

Robinhood files for IPO

The commission-free online trading app Robinhood filed for an initial public offering (IPO) on Thursday.

In Robinhood’s S-1 filing with the Securities and Exchange Commission (SEC), the size of the offering was listed at $100 million, which will likely change once terms for the share sale have been established. 

In the first quarter of 2021, the stock trading app lost $1.4 billion, according to its S-1 filing. Additionally, Robinhood’s total revenue grew by 309 percent in the first quarter of 2021 to $522 million, compared to $128 million in the first quarter of 2020.

Robinhood will list their stock under the symbol “HOOD” on the Nasdaq Stock Market.

The company, which has been seen as a lucrative platform to attract younger, newer investors, has 18 million funded retail clients, according to CNBC.

The IPO filing comes a day after a financial industry regulator told the stock trading app that it had to pay $70 million in a settlement.

Financial Industry Regulatory Authority (FINRA) alleged that customers had been give incorrect information regarding the net value of investments, the amount of risk customers were taking, or if they would be required to put up more cash for current positions.

Another concern FINRA alleged was that the app had allowed customers to trade options when they did not meet the app’s requirements or should not have been allowed to trade for other reasons.

Additionally, the settlement also cited technological issues that customers experienced where several outages locked out customers from their accounts.

It’s the largest penalty that FINRA has ever given a company, and the app will pay $57 million in fines to FINRA and $12.6 in damages to customers.

In a statement, Robinhood did not address the allegations that the financial industry regulator made but tried to emphasize recent improvements.

“Robinhood has invested heavily in improving platform stability, enhancing our educational resources, and building out our customer support and legal and compliance teams. We are glad to put this matter behind us and look forward to continuing to focus on our customers and democratizing finance for all,” the company said on Wednesday.