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Trading app Robinhood sets share price at low end of range in IPO

IPO update

Robin Hood has set its share price at $ 38 per share, the lower end of its target range, reflecting the slump in investor demand for the long-awaited initial public offering of the popular trading app.

The company, which aimed to sell 55 million shares, set the range between $ 38 and $ 42 per share. The hottest tech IPOs often set higher-than-expected prices, but Robin Hood’s value shows that investors’ desires weren’t tired of the stocks of the brokerage firm.

The final offer price of $ 38, announced late Wednesday, gives Robin Hood a valuation of $ 31.7 billion.Individual investor Previously evaluated It will be over $ 11 billion in August. The stock is expected to open on Thursday on the Nasdaq Stock Market.

California-based Robin Hood Venue of choice For many first-time equity investors, we offer commission-free trading encouraged by rewards, bonuses and push notifications. With a median age of 31, customers are often younger and have less account balances than established online brokerage firms such as Schwab, Fidelity, and E-Trade.

With explosive growth, the number of accounts on the platform doubled from the beginning of the year to 31 million.

However, Robin Hood has also been criticized by regulators for its game-like features in the app, limited customer service, and its reliance on the controversial practice of selling transactions called order flow payments. In June, financial industry regulators fined Robin Hood $ 70 million for causing “widespread and serious harm” to customers. This was the biggest penalty the authorities have ever issued.

Offering up to 35% stake My customer.. Robin Hood’s modest desire for an IPO is how investors maintain their high trading volumes in the post-pandemic world where investors have had time for recent attention and other pursuits. It suggests that there was no immunity to concerns about what to do.

Robin Hood’s offer paves the way for a plunge for its executives and investors. At IPO prices, Robin Hood co-founders Baijubat and Vladimir Tenev will own $ 3 billion and $ 2 billion worth of shares, respectively.

Index Ventures, the company’s largest external investor, will hold $ 3.2 billion worth of shares.

Robin Hood’s tremendous growth caused regular technical outages during periods of volume growth, and during the sharp rise in the share of Meme shares GameStop in January, the platform suspended trading, We had to raise billions of dollars to meet the capital requirements for market makers.

Investors who provide $ 3.5 billion in emergency funding will receive shares at a 30% discount on the offer price as their debt is converted to shares.

Bert and Tenev retain Robin Hood’s majority voting rights through a dual-class stock structure. This means that you own more than 65% of your voting rights, even though you own less than 20% of the company’s stock.

This high level of voting management was cited by institutional investors as a concern about participation in the offering, despite Robin Hood’s recent strong performance.

Trading app Robinhood sets share price at low end of range in IPO Source link Trading app Robinhood sets share price at low end of range in IPO

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