Robinhood Reported to File Confidentially for IPO Within March

Robinhood Markets Inc., the trading platform behind the boom-and-bust swing in GameStop Corp.'s shares, plans to file confidentially for an initial public offering (IPO) in March, according to people familiar with the matter, Bloomberg reported.

Robinhood's management reportedly held discussions this past week with underwriters regarding moving forward with a potential filing "within weeks," said the sources. No definite or final decision has been made yet on this matter and the timing of the IPO might change as well, the sources claim.

Robinhood had been eyeing an IPO as early as 2018 and initially targeted the year 2021. Last year, Robinhood was valued at nearly $12 billion, and in December, Reuters reported Robinhood hired Goldman Sachs to lead an IPO that could value the fintech startup at more than $20 billion. Bloomberg is now reporting Robinhood's IPO could be valued at around $30 billion due to its latest fundraise. 

Recently, Robinhood secured $3.4 billion in capital from its investors in order to post additional collateral with the Depository Trust & Clearing Corporation, the sector's clearinghouse.

Robinhood has been able to attract a large number of young Millennial and Gen Z investors and has become even more popular during the COVID-19 pandemic because many people are spending a lot of time at home and might be engaging in online trading activities to occupy their time.

However, since the beginning of the year, Robinhood has been engulfed in scandal. In late January, many of its users — some convening on the Reddit forum r/WallStreetBets — started buying shares of companies such as Gamestop and AMC, squeezing hedge funds. Robinhood then temporarily restricted users from buying shares in those companies. The company said in a blog post that Robinhood did this to help meet its deposit requirements, but that hasn't stopped it from facing backlash and accusations of market manipulation.

Robinhood Financial said in a filing Friday that Robinhood was in talks with Financial Industry Regulatory Authority to settle an investigation regarding March 2020 app outages and options trading. The US Securities and Exchange Commission (SEC) and FINRA are currently looking into how Robinhood shows cash and purchasing power to clients and its options trading processes, the filing revealed.

In its IPO, Robinhood has been considering selling some of its shares directly to its own users, Bloomberg News reported. The IPO could also help Robinhood, which had over 13 million users by the end of last year, further grow.