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Robinhood (HOOD) files to go public, IPO prospectus discloses 18 million accounts

Online stock trading app Robinhood has filed a prospectus today ahead of an IPO. Here's everything of interest in the SEC filing.


The Robinhood app has gained a ton of popularity and attention this year with the rise of meme stocks like GameStop and AMC, alongside the monstrous rise of the Dogecoin cryptocurrency. Today, the company filed with the SEC that it intends to go public. The stock will trade as HOOD on the NASDAQ if everything goes as planned.

The filing breaks down some interesting stats about Robinhood's operations. Unlike a lot of recent IPOs, the company actually turned a profit in 2020, albeit barely. 2020 profits totaled $7.45 million on net revenue of $959 million, compared to a loss of $107 million on net revenues of $278 million in 2019. Not all is great for the house of hood, as the company lost $1.4 billion during the first quarter of 2021 during the first GameStop short squeeze. 

Robinhood also disclosed some more information about their company in the S-1 SEC filing. The company has over 18 million accounts as of March 2021, and assets under custody amount to $80 billion. Monthly active users totaled 17.7 million in March. The company also hopes to raise $100 million in the IPO with Goldman Sachs, Citigroup, and JP Morgan participating as underwriters. 

Robinhood also highlighted that their business model is totally at risk due to regulation of payment for order flow style companies: 

Robinhood has already been penalized for their bad user experience. FINRA slapped them with a $70 million fine earlier this week as a result of issues dating back to March 2020. The company has failed to educate their users about the risks involved with options trading or using margin, all while focusing on making the app feel more and more like an online casino with gamification elements. Robinhood was also sued by the family of a young man who took his life after thinking he owed $700,000 due to an error on the part of the app. 

Are you going to buy shares of Robinhood when it starts trading under the symbol HOOD on the NASDAQ? Do you think investing is dumb? Are you still salty about what happened to GME in January? Let us know in the comments section below. We really want to hear your feedback.

This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.

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