It wasn’t long ago that the infamous Robinhood Markets Inc. brought Wall Street to its knees when it submitted a confidential plan to go public in 2021. It was speculated that the highly anticipated Robinhood IPO could help the Menlo Park, California-based company net nearly $2 billion from the sale of roughly 55 million shares. Robinhood shares closed down more than 8% in its NASDAQ debut, after the pricing near the low end of its IPO range.
The online brokerage app started trading at $38 per share, the low end of its range, valuing the company at $32 billion. After dropping approximately 10% and ending the session at $34.82, Robinhood’s market cap was $29 billion.
Robinhood is trading for the first time under the ticker HOOD. The trading app hit the public markets in order democratize for budding investors.
Robinhood has soared in popularity among amateur- and retail-investors. It sold shares in its IPO at $38/piece on Wednesday morning. The trading app is valued at 10.5 times forward EBITDA. It sold 52.4 million shares, raising close to $2 billion.
Robinhood co-founder Vlad Tenev and Baiju Bhatt each sold about $50 million worth of the company’s stock. Robinhood was last valued in the private markets in September at $11.7 billion.
Goldman Sachs and JPMorgan Chase are the investment banks that led the Robinhood IPO. Underwriters will have an option to buy an additional 5.5 million shares.
Robinhood was profitable in 2020, generating net income of $7.45 million on net revenue of $959 million in 2020, compared to a loss of $107 million on revenue of $278 million in 2019.
Robinhood made a loss of $1.4 billion during the first quarter of 2021 due to emergency fundraising-related losses during the GameStop rally. The trading app generated $522 million in revenue in the quarter, up 309% from the $128 million it made a year earlier.