Fee-free trading app Robinhood is seeking a market valuation of US$35 billion in its upcoming initial public offering, according to a filing to the U.S. Securities and Exchange Commission. Although the amount is significant, it is lower than the US$40 billion initially estimated, due in part to slow crypto trading in recent months.
- The IPO will see 55 million shares offered at an estimated US$32 to US$42 each. The company hopes to raise as much as US$2.3 billion.
- Although Robinhood is used primarily for trading traditional stocks, it recently revealed that customers traded US$88 billion worth of cryptocurrency on the platform in Q1 — driven in large part by the popularity of Dogecoin, which comprised 34% of that sum.
- By comparison, crypto exchange Coinbase saw US$335 billion in the same quarter and was valued at an estimated US$100 billion when it was listed in April.
- Robinhood shot into the international spotlight in March, when it became the center of the GME saga, in which a group of day traders on Reddit coordinated a short squeeze on GameStop shares, causing huge losses for several hedge funds. The incident was the first major incidence of “memestocks” — shares or assets whose value is driven by a community joke or meme — which in turn led to the prominence of memecoins such as Dogecoin and Shiba Inu.