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By Matt Egan, CNN Business
Robinhood could soon be worth $ 35 billion.
Robinhood, which plans to list on the Nasdaq under the ticker “HOOD,” expects to sell shares between $ 38 and $ 42 apiece.
This translates to a market valuation of between $ 27 billion and $ 35 billion, assuming Robinhood underwriters exercise their full stock option.
Despite a series of controversiesRobinhood is likely to be a hot IPO as it grows rapidly as retail investors rush into the stock market boom.
Robinhood’s revenue jumped 245% to $ 959 million last year, allowing the trading app to make a small profit.
Founders at the helm
The IPO will leave Robinhood CEO and co-founder Vlad Tenev and co-founder Baiju Bhatt with a strong influence on the company.
Robinhood plans to sell 52.4 million shares on the IPO. Tenev and Bhatt also sell an additional 2.6 million shares in the deal.
After the closing of the IPO, all class B shares will be held by Tenev and Bhatt. Tenev will control approximately 7.9% of the outstanding shares of Robinhood as well as 26.2% of the voting rights of the outstanding shares, according to the documents.
Bhatt, now Creative Director and Director, will hold 7.9% of the economic interests and 39% of the voting rights.
The IPO comes amid a wave of legal and PR issues for Robinhood. The company’s business model is coming under close scrutiny by regulators in the wake of the GameStop business saga. Critics argue that Robinhood’s reliance on order flow payment, where it receives revenue to route trades to high-speed traders, is rife with conflicts of interest.
Last month Robinhood was slapped with the the biggest fine ever imposed by the Wall Street self-regulator over allegations he misled investors. Robinhood recently reached a settlement with the family of Alexander Kearns, a 20-year-old trader who committed suicide in 2020 after seeing a negative balance of $ 730,000 on his Robinhood account and mistakenly believed he owed that amount.
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