Robinhood has confidentially filed for a 2020 initial public offering, and investors are paying close attention. What will a Robinhood IPO look like in the wake of the GameStop (NYSE:GME) and r/WallStreetBets saga? And what do potential Robinhood stock investors need to know now?
Most importantly, investors should know that the confidential nature of the filing limits the available details. However, Axios has confirmed the initial Bloomberg report. This is also not the first time a 2021 Robinhood IPO has been in the spotlight.
With that in mind, here is what you should know now:
- Bloomberg reported this afternoon that Robinhood has officially filed with the U.S. Securities and Exchange Commission for a 2021 IPO.
- There is a lot we do not know now, including how many shares it will offer and under what ticker.
- We also do not know if Robinhood is eyeing a traditional IPO or a direct listing.
- Direct listings have been increasingly popular with tech companies, with Roblox (NYSE:RBLX) recently choosing that route.
- We do know that Robinhood plans to trade on the Nasdaq Exchange when it comes public.
- TechCrunch speculates that the confidential filing is a sign Robinhood stock could be trading relatively soon.
- Robinhood has been increasingly popular with retail investors, and its revenue grew in 2020.
- Part of this is due to the rise of day trading during Covid-19 and the fee-free trading platform.
- The soon-to-debut company has also been in the news for some less fortunate reasons.
- Known for its retail popularity, Robinhood became closely involved with the GameStop saga.
- The company came under fire for limiting trading (and placing some outright bans) on stocks like GME and AMC Entertainment (NYSE:AMC).
- These actions have led some investors to seek out alternate platforms.
A 2021 Robinhood IPO: What to Know?
Clearly, Robinhood stock will be hitting Wall Street at a time when the company is incredibly relevant. But what else do you need to know right now?
As TechCrunch reported about the Robinhood IPO, must of its revenue comes from payment for order flow (PFOF). The company told Congress that this accounts for the majority of its top line, and this revenue source has quickly expanded in 2020. PFOF income went from roughly $91 million in the first quarter of 2020 to over $220 million in the fourth quarter. Robinhood discloses other revenue sources like its Robinhood Gold suite of investing tools.
As we learn more about the initial public offering, this will be a story to watch. Will investors rush into this because of its identity as a fast-growing, tech-focused startup? Or will GameStop concerns and competition from platforms like eToro be enough to shake Robinhood stock? It appears only time will tell.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.