Robinhood, a stock-trading app, has recently hired Goldman Sachs, which is a leading financial institution. Through this, they will be leading the initial public offering (IPO) by next year. According to the report, through this offering, the market value of the fintech company will be more than $20 billion which was earlier at $11.7 billion. Both the firms have not given any kind of statements regarding this.
According to the former co-CEO of Robinhood, Baiju Bhatt, the firm has been planning to launch an IPO since 2018. The firm is very well known for popularizing commission-free stock trading. At the present time, there are around 13 million users of the platform.
There are several critics who have accused Robinhood that the firm has gamified investing to a very great extent. Due to this, there is a huge risk that newcomers or inexperienced clients can cause major financial harm to themselves. Back in June 2020, one options trader killed himself due to facing some huge losses. Several accusations were for the firm’s novice traders of skewing the market.
Along with the criticism, Robinhood has also faced scrutiny from federal regulators as well. The firm was also on the target of the Securities and Exchange Commission and the Financial Industry Regulatory Authority. Both the authorities were investigating the firm for handling day-long outages, back in March 2020. Other than this, the SEC was investigating the firm for all the alleged failures for the high-speed traders. Now this step by the firm for launching IPO is also surrounded by several difficulties. The reason is all the criticism and investigation that the firm has been facing from critics and regulators. There are several positive predictions as well because the crypto market is performing really well for the past few weeks.