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Robinhood Prices Its I.P.O. at $38 a Share

Robinhood Prices Its I.P.O. at  a Share
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Robinhood Prices Its I.P.O. at  a Share

Robinhood Prices Its I.P.O. at $38 a Share

SAN FRANCISCO – Robinhood is known for its association with “memes actions”. Now, the stock trading app could become one.

Robinhood valued its initial public offering at $ 38 a share on Wednesday, according to two people familiar with the transaction, valuing the company at $ 31.7 billion. He raised $ 2.1 billion dollars in the offer, setting the stage for the company to begin trading on Thursday under the ticker HOOD.

The price was at the low end of Robinhood’s initially disclosed range of $ 38 to $ 42, showing average interest in the stock.

Robinhood’s IPO is being watched closely, even in the midst of the most frantic year for listings since the dot-com bubble of 2000. The company’s role in facilitating stock transactions, its mission to turn Wall Street upside down and its string of recent controversies have made its offering a symbol of Silicon Valley’s disruption and the challenges that come with it. It has also been closely identified as driving the roller coaster trade of “memes stocks” like GameStop and AMC Entertainment this year.

Robinhood, which has said it wants to democratize finance, has also sold much of its offering directly to its users through its app. This will test whether its customers will keep the stock or empty it quickly. Robinhood angered his clients when he halted some trades in January, prompting some to plot to flip or bet against the company’s shares when its shares were listed.

Because of this, Robinhood bankers have said they expect early trading for the stock to be more volatile than other initial public offerings.

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The company has also faced several lawsuits and regulatory investigations into its operations. On Tuesday, he said in a filing that the Financial Sector Regulatory Authority is investigating its founders’ compliance with registration requirements.

This follows a $ 70 million fine that Robinhood paid FINRA in July for misleading customers and injuring them during blackouts. Last year, the company also paid the Securities and Exchange Commission $ 65 million for misleading its clients.

Over the weekend, Robinhood founders Vlad Tenev and Baiju Bhatt hosted a public version of its investor presentation for clients, answering questions about the regulation and its business model. Mr Tenev marveled at Robinhood’s rapid growth, noting that it had also “led to some real challenges”.

The Wall Street Journal previously reported on Robinhood’s share price.

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