Why Has Robinhood Filed To Go Public Confidentially?

After months of speculation, the controversial, commission-free trading platform confidentially filed its S-1 prospectus yesterday.

Despite accusations of deceiving customers, its CEO being hauled before Congress, and — worst of all — getting called out by Michael Bolton in a viral video, Robinhood is s going public after filing confidentially for an IPO yesterday.

What’s a ‘confidential’ filing?

A confidential IPO filing allows any company to file an S-1 with the SEC without making its financial details public. This information will be made available 15 days prior to the actual offering — which is expected to be in the first half of 2021. 

So I’m afraid we’ve got no numbers for you, just the knowledge that it will be listing on the Nasdaq under the ticker symbol, HOOD, and that its last private valuation was $12 billion. 

The timing is certainly odd as Robinhood set off a firestorm in January when it temporarily banned users from buying shares of GameStop and other Reddit-fueled ‘hype stocks’. Robinhood blamed the controversial restrictions on a demand from its clearinghouse — the middle-person between the buyer and seller — to put up as much as $3 billion due to the market volatility. Robinhood was forced to draw down its credit lines and swiftly raise $3.4 billion.

This in turn raised several questions about its business model, management team, and of course, severely damaged its reputation among loyal users. 

However, while hurdles such as this would normally doom prospective IPOs to the annals of history as yet another ‘what could have been’, the market is simply too hot right now. The pandemic has set off a chain reaction of surging valuations, new retail investors, and outsized IPOs, and Robinhood is making the most of it.

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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here