Robinhood Markets sets sights for US$35bn valuation

Robinhood Markets Inc has priced its forthcoming IPO in the middle of the expected range.

The trading app’s float is likely to be one of the big market events of this year given the controversy and huge interest in memestocks such as AMC and GameStop that sent its volumes rocketing.

Shares are expected to be priced between $38 and $42, the company said in its filing document, with a valuation of US$35bn at the top of the range.

Some 55mln shares are to be offered in the IPO, with founders Vlad Tenev and Baiju Bhatt and its CFO selling 2.63mln of these.

Following the IPO, Tenev will hold around 26% of the voting shares and Bhatt 39%.

The document also revealed that Salesforce Ventures, the investment arm of software provider Salesforce is looking to invest up to US$150mln of non-voting shares in the listing.

Robinhood has never been far from controversy ever since it was set up and earlier this year had to raise US$3.4bn to cope with a huge spike in trading as retail investors piled into memestocks and also cryptocurrencies such as bitcoin.

Its prospectus revealed it is under investigation in numerous places while it faces class-action suits following the suspension in trading in Gamestop earlier in the year when its systems were overwhelmed by the activity.

Robinhood’s practice of using market makers to outsource trades on its app has also been heavily criticised.

Customers will be allowed to apply for up 35% of the shares going on sale, the company had said earlier.

Shares will trade on Nasdaq under the “HOOD” ticker.

Story by ProactiveInvestors