Is a Robinhood IPO Date coming soon? They went public in 2021. Robinhood has come a long way in accomplishing its mission to “democratize finance for all” since its founding in April of 2013. That’s one reason we closely watched this IPO. Even the harshest critics can’t deny that the commission-free trading app (and website, but who uses the website?) has revolutionized the brokerage industry.
Industry brokerage firms like TD Ameritrade and Schwab (who will finalize their merger within the next three months), Interactive Brokers, ETrade, etc., now offer free trades for online retail traders.
The critics have plenty of valid points. However, Robinhood’s customer service certainly leaves much to be desired, and the app is ineffective for active traders.
A Robinhood IPO date happened on July 29, 2021. HOOD could be an extremely interesting stock to add to a portfolio. But is it coming soon? Per the Robinhood CEO, they do intend to go public. Robinhood competitors beware. They could become a major player in the market.
Background Check On RH
Before a Robinhood IPO Date could occur, a company must know how it would make money. Investors learned that lesson when the dot-com bubble burst in 2001. But if there are no fees, how does Robinhood make money?
We have learned through the “free” business models of Google and Facebook that if you aren’t paying for a product, you ARE the product. It’s no different with Robinhood!
They make money from their “Robinhood Gold” memberships, interest income from cash in users’ accounts, and some of their new banking services.
It’s believed that at least 55% of their revenue comes from “order flow,” ” essentially Robinhood selling the orders from their platform to institutional trading desks.
Robinhood’s user growth has been exploding this year during the pandemic. They reached 1 million users in 2016 and had grown to 6 million by October 2018.
They added approximately 3 million users in the first quarter of 2020 and have over 13 million users today. These are mostly very small accounts, however. JMP Securities says the average Robinhood account has only \$1000 – 5000.
They had a series F round in May 2020 that raised $280 million with a valuation of $8.3 billion, then announced another $320 million on July 13, 2020, with a valuation of $8.6 billion.
Make sure to check out our Robinhood review.
Platform Issues
The company has had many issues with the platform. That could have had something to do with the Robinhood IPO date that was delayed until July 2021.
We’ve discussed in this blog that Robinhood isn’t a very good platform for active traders like day trading on Robinhood. But just in case you missed those posts, I’ll quickly review them here.
First, the order fills are slow, and there are no hotkeys. Slow order fills can hurt a trader fast if trading something highly volatile. They also have no phone number.
Customer service is handled via email, and response times are often very slow. A third issue with the Robinhood platform for day traders is the lack of advanced orders like OCOs or trailing stops.
Another issue that has since been resolved but remains a visible bruise, at least in my opinion, was their mishap with paying interest on cash balances in their user’s accounts.
They initially said that the money would be SIPC-insured. However, the proper insurance would have been from the FDIC. Robinhood has now fixed this issue, paying a paltry 0.1% on cash balances.
However, the incident showed that management was going too fast and not getting enough into the details of their new offerings. It’s not a reassuring trait for a financial firm.
Platform Downtime and Order Fills
Probably the biggest issue that Robinhood must address is platform downtime. Almost all brokers had platform issues during the extreme volatility in March.
But Robinhood’s seemed particularly egregious, perhaps because of the lack of customer service. Robinhood has experienced downtime on its platform several other times as well.
Nothing can be more frustrating for a trader than losing money and being unable to do anything about it.
An emerging issue that will likely gain more scrutiny is around unsophisticated traders losing large amounts of money.
They do not understand some of the products they buy and sell. This was very sadly demonstrated in June when a 20-year-old Robinhood user committed suicide after seeing a negative $700,000+ balance in his account.
Robinhood is exploring ways to make sure traders understand the products they’re trading. This is done through education and stricter rules regarding margin levels. However, since the Robinhood IPO date, they’ve done fairly well.
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Can You Buy IPO on Robinhood?
A Robinhood IPO date happened in 2021. Trading with confidence will help you in trading $HOOD. Learn how to trade stocks with confidence. Then you’ll know that you got the best entry and exit on Robinhood stock.
The Robinhood Effect
As mentioned earlier, Robinhood was the main catalyst in the race to $0 commissions. But the OG discount broker was Charles Schwab.
Before the Securities Act Amendments of 1975, broker fees were as high as \$80/trade. With \$0 commissions on almost all online brokerages today, Main Street has never been easier to participate in the stock market.
We saw above that wide public participation in stocks isn’t always good. Besides that tragic story, we saw some other strange market occurrences.
Robinhood traders largely attributed to those occurrences. There have been enormous gains in some sketchy stocks that have ranked high on robintrack.net, culminating in a 1500% rally in Hertz stock after it announced its bankruptcy.
The enormous sell-off due to the coronavirus pandemic brought millions of new traders into the market, which may have helped it have the fastest 40% rally since the March 23rd low.
The extremes of the 2020 market will be a history lesson for many years to come, and the way it worked out had many first-time traders outperforming the largest hedge funds in the world.
The Robinhood app will live up to its namesake if its users can keep that up! Which was helpful on a Robinhood IPO date.
Final Thoughts: Robinhood IPO Date
Despite these issues, Robinhood can be a great broker for a new investor. There is a low barrier to start investing for anyone, which is why they have been so successful. It” ‘s perfect for one who just wants to buy a few shares of stock to hold for a long terthe m and grow an account. But what about the Robinhood IPO?
There was a lot of speculation that we’d see the Robinhood IPO Date in 2020. However, Robinhood went public on July 29, 2021.
It’s hard to imagine that they’ll continue to have the growth numbers they had in 2020. So, they followed in the footsteps of most high-profile IPOs and waited until their best growth days were behind them before offering shares to the public.
Frequently Asked Questions
The Robinhood IPO date was July 29, 2021. They trade under the ticker symbol $HOOD.
Robinhood users were able to trade the IPO since it is a publicly-traded company.
Robinhood matched the $38 IPO price at open. However, the price fell over 10% and closed below its initial $38 open. Like most IPOs''s it was a disappointing debut.
At the Robinhood IPO date, they opened at $38 a share. They were valued around $32 billion.
