Markets

Robinhood is seeking a market valuation as high as $35 billion in upcoming IPO

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Key Points
  • Robinhood is seeking a market valuation of as much as $35 billion in its upcoming initial public offering, according to its amended prospectus released Monday.
  • The stock trading app will attempt to sell its share at a range of $38 to $42 per share.
  • Robinhood is looking to sell 55 million shares at that range to raise as much as $2.3 billion.
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Robinhood sees IPO price at $38 to $42 per class A share

Robinhood is seeking a market valuation of as much as $35 billion in its upcoming initial public offering, according to an amended SEC filing released Monday.

The stock trading app will attempt to sell its share at a range of $38 to $42 per share, according to the updated prospectus. Robinhood is looking to sell 55 million shares at that range to raise as much as $2.3 billion.

Robinhood's last private market valuation was $11.7 billion as of September.

Goldman Sachs, Citigroup and JPMorgan are the lead underwriters on the deal.

Robinhood — which plans to trade on the Nasdaq under the symbol HOOD — also updated several of its financial and user metrics in the filing. The company estimates it has 22.5 million funded accounts — those tied to a bank account — as of the second quarter, up from 18 million in the first quarter of 2021.

The Menlo Park, California-based free-trading pioneer estimates second quarter 2021 revenue between $546 million and $574 million. This would be an 129% increase from the $244 million in the second quarter of 2020. The company generated $522 million in revenue in the first quarter of 2021.

However, Robinhood estimates a net income loss of $537 million to $487 million in the second quarter of 2021, compared with a profitable second quarter in 2020.

Robinhood', whose longstanding mission is to "democratize" investing, is seen as the main gateway to the markets for young investors. The app experienced record levels of new, younger traders entering the stock market during the pandemic and during the GameStop trading mania.

Competitors of Robinhood include Fidelity, Charles Schwab, Interactive Brokers and start-ups like Webull and Sofi. Charles Schwab has a market capitalization of $130 billion and Interactive Brokers has a market valuation of $26 billion.

Robinhood — which offers equity, cryptocurrency and options trading, as well as cash management accounts — is expected to make its public debut by the end of next week.

Robinhood is a five-time CNBC Disruptor 50 company that topped this year's list.

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