SAN FRANCISCO – Robinhood is known for its association with “meme stocks”. Now the stock trading app could become one.
On Wednesday, Robinhood valued its IPO at $ 38 per share, the company said, valuing it at $ 31.7 billion. It raised $ 1.89 Billions from the offer, paving the way for the company to start trading on Thursday under the symbol HOOD.
The price was at the lower end of Robinhood’s original $ 38-42 range, a sign of potential investor reluctance. Robinhood’s bankers have announced that early trading in the stock will be more volatile than other IPOs
Robinhood’s offering is being watched closely, even in the busiest year for public listings since the dot-com bubble in 2000. The company’s role in facilitating stock trading, its mission to turn Wall Street inside out, and a number of recent controversies have come to the fore a symbol for the disruption in Silicon Valley and the challenges that come with it. It has also been closely identified with driving the roller coaster trading of “meme stocks” like GameStop and AMC Entertainment that year.
Robinhood, which has announced that it wants to democratize the financial sector, has also sold a large part of its offering directly to its users through its app. That will test whether his customers are holding onto the stock or are quick to throw it away. Robinhood had angered customers when it stopped certain trades in January, causing some to spin or bet against the company’s stock when it was listed.
The company has also faced multiple legal proceedings and regulatory inquiries related to its business. A filing on Tuesday said the financial industry regulator is investigating its founders’ compliance with registration requirements.
This followed a $ 70 million fine Robinhood paid FINRA in July for misleading customers and causing them harm in the event of outages. Last year, the company also paid $ 65 million to the Securities and Exchange Commission for misleading customers.
Over the weekend, Robinhood founders, Vlad Tenev and Baiju Bhatt, moderated a public version of their client investor presentation asking questions about regulations and their business model. Mr. Tenev marveled at Robinhood’s rapid growth but also noted that it “has created some real challenges”.