Popular trading app Robinhood on Thursday filed for its initial public offering,m and disclosed that it will set aside up to 35% of shares for retail investors who rarely get to buy at a company's IPO price.
Timing: Earlier this week, Robinhood agreed to pay a record $70 million in fines and restitution, as part of a settlement with the Financial Industry Regulatory Authority over providing customers with "false or misleading information."
- The deal was viewed as key to letting Robinhood "flip" its IPO filing from confidential to public.
Background: Today's move also comes several months after Robinhood came under fire for restricting certain trades, related to a burst of activity on GameStop and other meme stocks.
- The SEC continues to investigate the trading halt, which also sparked Congressional hearings, and Robinhood remains the defendant in several related class action lawsuits.
- It also was sued by Massachusetts regulators for alleged securities law violations.
- The SEC also reportedly slowed down Robinhood's IPO process over questions about its growing crypto-trading business.
ROI: Robinhood has raised over $5.5 billion since being founded in 2013, including $3.4 billion via a convertible note investment in the aftermath of the trading fiasco.
- Major VC backers include Sequoia Capital, Index Ventures, Andreessen Horowitz and New Enterprise Associates.