Trading app Robinhood Valued at $32B after IPO

The long-waited and closely-watched Robinhood IPO kicked off with a bang after the stock trading app raised nearly $2 billion in its initial public offering, selling shares at $38 per piece, the low end of its target range. The company debuted on the Nasdaq under the ticker "HOOD".

The Robinhood IPO has pushed the platform's valuation to $32 billion. The company was lasted valued at $11.7 billion in September 2020. Prior to its Nasdaq debut, the stock trading platform priced shares between $38 and $42. It ended up selling 52.4 million shares at $38 a share, raising nearly $2 billion. Robinhood founders Vlad Tenev and Baiju Bhatt both sold about $50 million worth of stock each. 

Both Tenev and Bhatt received $3 billion and $2 billion worth of shares, respectively. Robinhood customers were allocated up to 35 percent of its shares. The company's largest Investor, Index Ventures would own stake worth $3.2 billion.

Robinhood has gained popularity in the stock investing ecosystem, especially among young and new investors. The platform offers equity and options trading, as well as cryptocurrency and cash management accounts. 

Underwriters on the deal will have the option to buy additional 5.5 million shares, with Goldman Sachs and JPMorgan Chase as the lead investment banks.

In its second quarter, Robinhood estimated that it had 22.5 million funded accounts, that is, those linked to a bank account. The numbers moved from 18 million in the first quarter, up 151% from the same period a year ago. The company saw an explosive growth in its user-base, doubling the number of active accounts since the start of the year.

In its updated prospectus, Robinhood increased its estimated second quarter revenue from $546 million to $574 million, up from $244 million a year ago. In the first quarter, revenue jumped 309% to $522 million from $128 million a year ago. The platform, however, expects a net loss of between $487 million to $537 million in the second quarter, prior to a year ago when it turned in profit.

While Robinhood IPO is currently the most-watched IPO, the app recently came under fire from regulators over its game-like features, limited customer service, and a practice it calls payment for order flow, a controversial proactive of selling trades. In June, Robinhood was fined $70 million by the Financial Industry Regulatory Authority for causing "widespread and significant harm" by customers.

The Robinhood IPO story is still developing