Robinhood, the stock exchange app, said on Tuesday that it had submitted a draft application for listing shares to the public, joining the wave of financial technology companies planning to list on stock market or raise new capital.
The exact timing or price of the offering is yet to be determined. Private market investors have valued Robinhood around $ 12 billion and some predict its initial public offering could go as high as $ 20 billion. A person familiar with the company said they were working with Goldman Sachs to make an offer.
Robinhood used a process known as confidential filing that allowed it to keep some details private during its early publicity.
Financial technology companies thrive. Coinbase, a crypto startup, is expected to list its shares in the coming weeks, with investors estimating it could be worth as much as $ 100 billion. Stripe, a startup that provides payment processing services, raised capital this month at a value of $ 95 billion, making it the most valuable U.S. startup.
Robinhood started going public last year after its growth skyrocketed during the pandemic, with some people using their stimulus tests for everyday trading.
But it halted those plans in January when a group of online traders banned together to boost stock prices of so-called “meme shares” like GameStop, costing short sellers money. and forcing exchanges to suspend trading of certain stocks.
Amid the frenzy, Robinhood restricted trading to a number of stocks, outraged many of its users, and withdrew nearly 50 lawsuits and numerous investigations from regulators. Vlad Tenev, the company’s chief executive, was called upon to testify before Congress about the madness of the market and Robinhood’s role in it.
Despite the anger, GameStop’s crash spurred Robinhood’s name recognition and resulted in many downloads of its app, which is very popular as it does not charge stock exchange fees. Robinhood has been criticized for turning intraday trading into a gambling-like game where investors do not always understand the risk they are taking.
Private investors have sided with Menlo Park, the California-based company. In the frenzy, Robinhood raised two emergency funding rounds totaling $ 4.4 billion in just a few days.