A revised prospectus submitted by Robinhood yesterday shows that the company’s goal is to obtain a valuation of up to 35 billion U.S. dollars in the upcoming IPO. The free options, cryptocurrency and stock trading service is expected to sell up to 55 million shares and raise more than $2 billion in funding when the IPO starts next week.
Robinhood’s goal is a $35 billion valuation
According to a revised prospectus filed with the US Securities and Exchange Commission on Monday, Robinhood is a free, fully traded exchange with a goal of achieving a valuation of up to $35 billion in the upcoming IPO. According to reports, the exchange will be listed as soon as next week and is expected to sell about 55 million shares in its IPO, raising more than US$2.3 billion in the process, and the stock price is between US$38 and US$42.
The mission of the exchange is to democratize investment products, and its valuation reached $11.7 billion in September last year. At that time, Robinhood raised $460 million in the extension of its G round of financing, and Andreessen Horowitz, Sequoia Capital, DST Global, Ribbit Capital, 9Yards Capital, and D1 Capital Partners participated.
Due to Covid-19 and other factors increasing trading interest, Robinhood performed very strongly in the first quarter. In the quarter, it generated $522 million in revenue, which was also benefited from cryptocurrency-related transactions, of which the rise of Dogecoin was an important factor.
Encryption business is booming
Robinhood was one of the companies that used cryptocurrency trading crazy earlier this year. The company revealed in its IPO documents that more than 9.5 million customers have used its platform to trade $88 billion in cryptocurrencies. The dog frenzy that affected the market also benefited Robinhood. In the same document, the company revealed that more than one-third of its cryptocurrency revenue in the first quarter came from Dogecoin.
The prosperity of its cryptocurrency-based business has also caused concerns among regulators. Earlier this month, the US Securities and Exchange Commission postponed Robinhood’s IPO due to concerns about the crypto part of Robinhood’s business model. Although the specific details of this delay are unclear, it shows that cryptocurrencies are in the eyes of regulators, especially for companies like Robinhood to go public.
Due to increased volatility, Robinhood restricts traders’ stock purchases, and therefore behavior in the GameStop stock craze has also been criticized. At the time, Robinhood CEO Vlad Tenev called this situation “unacceptable” and emphasized that they were doing everything they could to prevent it from happening again.
What do you think of Robinhood’s valuation target? Tell us in the comments section below.
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