Robinhood Markets Incorporation is an American financial services company. Headquartered in Menlo Park, California, Robinhood claims to make investment simple and democratic. It is also popular among amateur stock traders. According to media reports, the founders of the company Baiju Bhatt and Vlad Tenev were inspired by the Occupy Wall Street protests and thus created an app that is more accessible for individual investors.
Robinhood is a FINRA-regulated broker-dealer, registered with the US Securities and Exchange Commission. It is also a member of the Securities Investor Protection Corporation.
%u201CWe believe the financial system should be built to work for everyone. That%u2019s why we create products that let you start investing at your own pace, on your own terms,%u201D Robinhood%u2019s website reads in its %u2018about us%u2019 section.
Reportedly, Robinhood earns its revenue from three main sources: Interest earned on customers’ cash balances, selling order information to high-frequency traders and margin lending. As of 2021, Robinhood has 31 million users.
The company had 18 million funded accounts at the end of March with $81 billion in assets under custody, news agency AFP reported.
Robinhood’s growing population of individual investors have played a role in the so-called “Reddit Rebellion” in which retail investors coalesced on the Reddit social network in 2021 to support beaten-down stocks such as GameStop and BlackBerry.
Earlier in the year, Robinhood received a lot of attention after many members of a Reddit forum, Wallstreetbets, encouraged others to buy heavily shorted stocks like GameStop, BlackBerry, and Nokia, causing a huge stock fluctuation in Wall Street.
Why is Robinhood in news?
The app, on Monday, said that it is looking for a market valuation of as much as $35 billion in its upcoming initial public offering. The app will attempt to sell its share at a range of $38 to $48 per share. In its blockbuster IPO, Robinhood is looking to sell 55 million shares to raise as much as $2.3 billion. The app’s offering is being led by Goldman Sachs group and JP Morgan Chase and Co.
In March, Robinhood had announced that it had filed to go public secretly.
