Robinhood is set to debut on the Nasdaq Stock Exchange on Thursday. The fintech company priced its IPO at $38 a share last night and raised $2.1 billion. The stock is expected to open about 4% up today, valuing Robinhood at about $33 billion.
Robinhood’s IPO was unusual in a way that it allocated 20% to 35% of its shares on offer to retail investors. Traditionally, a fraction of that percentage is reserved for individual investors. Here’s why Mad Money host Jim Cramer thinks it was the toughest IPO he has ever seen.
CEO Tenev’s comments on CNBC’s “Squawk on the Street”
In his interview with CNBC’s “Squawk on the Street”, CEO Vlad Tenev did not give the exact percentage that was allocated to the retail investors but said:
“It’s certainly going to be one of the largest retail allocations ever, in line with Robinhood’s mission to democratize finance for all and give access to everyone.”
Tenev referred to the virtual IPO roadshow as an example of how Robinhood intends to engage with the retail investors and have them participate more actively in the company matters. According to the chief executive, Robinhood prioritizes customers profits over corporate profits.
“Eliminating commissions was just the start. We’re proud to have passed back more value to customers, and we’ll continue to keep doing that,” he added in his interview with CNBC.
Robinhood to diversity its sources of revenue
Robinhood generates most of its revenue from payment for order flow. As per CEO Tenev, the company intends to diversify its sources of revenue but will also continue to defend and elaborate on what payment for order flow is.
In its latest reported quarter, Robinhood customers traded roughly $88 billion of cryptocurrency, most of which was related to Dogecoin. The “meme moment”, as per Tenev, gives a clear indication that retail investors are interested in cryptocurrencies.
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Wajeeh Khan
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