U.S. stock and crypto trading app company Robinhood Markets, Inc filed an S-1 with the SEC on Thursday afternoon for an initial public offering (IPO), indicating that it intends to raise up to $100 million and that Robinhood will trade under the ticker symbol “HOOD”.
Robinhood plans to allocate 20 to 35 percent of its IPO shares to retail customers in an offering led by Goldman Sachs, JPMorgan Chase, Barclays, Citigroup, Wells Fargo, Mizuho and others.
The company said it has 17.7 million active monthly users, more than 50 percent of new subscribers and $81 billion in assets. A surge in intraday trading and new users last year caused Robinhood’s revenue to jump 245 percent to $959 million from $278 million in 2019.
Robinhood also said that 17 percent of its transaction-based revenue in the first quarter of 2021 came from cryptocurrencies, with dogcoins representing a large portion of its crypto-related revenue. During the same period, more than 9.5 million users traded about $88 billion in cryptocurrencies.
The filing reads, “A significant portion of our recent growth in net revenue from cryptocurrency transactions is attributable to dogcoin transactions. If demand for dogcoin trading declines and is not replaced by new demand for other cryptocurrencies supported by our platform, our business, financial condition and results of operations could be adversely affected.”
Just one day before the IPO announcement, FINRA ordered Robinhood to pay approximately $70 million in fines and required it to pay restitution to customers who allegedly suffered “extensive and material harm. In its filing, Robinhood reported that it had reached an agreement in principle with regulators to pay $57 million in fines, but only $4.5 million in restitution to affected customers.
In addition, Robinhood faces multiple lawsuits from regulators, states and individuals related to disruptions to the platform, account takeovers and trading restrictions related to the GameStop stock dispute. The company said it expects to pay $15 million to the New York State Department of Financial Services for “anti-money laundering and cybersecurity related issues.
The IPO was filed with the SEC at a time when the regulator’s staff was reviewing Robinhood and other issues related to its business.
According to Robinhood’s S-1 filing with the SEC, the value of bitcoin and other cryptocurrencies held by Robinhood on behalf of its customers has increased significantly. As of March 31 of this year, that figure reached nearly $11.6 billion, up from $480 million a year ago.
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