Robinhood online brokerage seeks market valuation of up to $ 35 billion

Robinhood, the online brokerage firm that found itself embroiled in this year’s memes stock phenomenon, will go public next week looking for a market valuation of up to $ 35 billion.

The company said in a regulatory filing Monday that it hopes to price 55 million shares in its initial public offering in a range of $ 38 to $ 42 per share. It could raise around $ 2.3 billion if the shares are sold at the high end of the range.

Robinhood offers approximately 52.4 million shares. Company founders Baiju Bhatt and Vladimir Tenev and CFO Jason Warnick are offering around 2.6 million shares. The company will not receive any proceeds from the shares sold by its officers and founders.

The underwriters have an option to purchase 5.5 million shares to cover any over-allotment.

Robinhood’s IPO will give investors the opportunity to own much of a fast growing company that has rocked the traditionally stable brokerage industry. The company plans to offer up to $ 770 million of its shares to its clients through its platform. The estimate is based on an offer price of $ 40 per share, the company said in the filing.

Meanwhile, the venture capital unit of enterprise software company has indicated its interest in buying up to $ 150 million of Robinhood stock at the IPO price, has said Robinhood.

Since its launch in 2014, the popularity of Robinhood has forced its competition to ditch commissions and come up with apps that make trading easy and maybe even fun.

The Menlo Park, Calif., Based company said in its filing that it had 17.7 million monthly active users as of March and that more than half of its customers are first-time investors.

Many of these new investors started trading on Robinhood due to the popularity of stocks even like GameStop. The ensuing trading frenzy forced Robinhood to limit some transactions due to the massive volume and caught the government’s attention.

Robinhood said on the record that it expects its revenue for the April to June quarter to be $ 574 million, more than double the increase from $ 244 million a year earlier. Despite this, the company expects a loss in the quarter ranging from $ 487 million to $ 537 million. Robinhood made a profit of $ 58 million in the same quarter of last year.

The company expects third quarter revenue to be lower, citing lower levels of business activity.



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