Robinhood, the US stock trading app, has filed confidential paperwork for an initial public offering (IPO) with American securities regulators as it followed a number of other platforms aiming to capitalise on the surge of interest in retail investing.
In a press release on Tuesday night, the trading app, which shot to prominence this year as thousands of retail traders took to the platform to buy shares in GameStop Corp (NYSE:GME) amid a Reddit-inspired buying frenzy, said it has confidentially filed a draft registration statement with the Securities and Exchange Commission (SEC) relating to an IPO.
READ: eToro unveils plans to go public via SPAC merger
However, the price range and number of shares that could be offered in a float were not revealed, with Robinhood saying it expected the IPO to take place after the SEC completed its review process.
If it goes ahead, Robinhood’s IPO could be one of the largest floats on the market so far this year, with the company having already secured substantial backing from investors earlier this year to cope with the influx of trading activity during the GameStop incident. With its balance sheet under strain in January, the firm tapped investors for US$3.4bn in cash, suggesting strong confidence in its business.
The firm may also have been inspired by plans from one of its rivals, Israeli platform eToro, to go public via a merger with a special purpose acquisition company (SPAC) which is expected to see it notch up a value of US$10.4bn.
However, Robinhood could face close scrutiny of its plans from US lawmakers after its decision to restrict the trading of certain stocks during the GameStop frenzy drew outrage from its users and saw its co-founder and chief executive, Vlad Tenev, hauled in front of a Congressional committee amid concerns the company is promoting the ‘gamification’ of stock trading.