Robinhood is a free cryptocurrency, stocks and options exchange that has raised nearly 2 billion U.S. dollars in its initial public offering, with a valuation of 32 billion U.S. dollars. Although the company is more valuable than Nasdaq itself, the IPO failed to bring the company’s expected valuation of 35 billion U.S. dollars. Robinhood trading will begin today, and its stock will be traded under the HOOD ticker symbol.
Robinhood failed to achieve its $35 billion valuation target
Free investment app Robinhood has been successful fully Its initial public offering raised nearly 2 billion U.S. dollars.However, the company failed to achieve its goals arrive It is valued at US$35 billion because its share price is US$38, which is at the low end of the proposed range of US$38-42. The company allows users of the exchange to obtain one-third of the available shares before listing, which is unusual in these processes.
Although Robinhood failed to meet its expected goals, its valuation was much higher than that of the previous round of financing, when the company reached $12 billion. The company is now in the mid-range of its competitors, with a valuation higher than Interactive Brokers (US$26 billion) but not as good as Charles Schwab (US$130 billion).
Robinhood leveraged the interest and growth of the stock and cryptocurrency markets in the first two quarters of this year, and used its popularity as one of the first exchanges to allow zero-fee transactions to prompt changes in the industry. But some experts claim that such valuations are unsustainable in the long run. Kathleen Smith of Renaissance Capital, statement:
It looks rich-unless the company can maintain this high growth.
Robinhood’s crypto business
Although Robinhood’s main income comes from options trading (38%), the company’s important income also comes from cryptocurrency-related transactions (17%). In this regard, Robinhood’s growth has grown exponentially.In the preliminary prospectus for the initial public offering filed with the U.S. Securities and Exchange Commission, the company statement The client’s transaction volume in the first quarter of this year was 88 billion U.S. dollars. This resulted in Robinhood holding nearly $12 billion in cryptocurrency for its users.
Robinhood’s large-scale cryptocurrency trading business has attracted the attention of regulators. According to people familiar with the matter, the SEC delay Robinhood’s IPO was due to concerns about how the company will conduct this business. Robinhood is also currently receiving attention from regulators because its CEO Vlad Tenev Licensed Provided by FINRA, the regulator of Wall Street. However, Robinhood has announced that Tenev does not need to register because he is the CEO of Robinhood Markets and not the CEO of its trading subsidiary Robinhood Financial. The investigation is ongoing.
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