Robinhood’s IPO is expected to hit the Nasdaq today, but it appears that unenthusiastic demand has forced the trading platform to price its shares below expectations.
According to the Wall Street Journal, which cited individuals familiar with the matter, Robinhood shares that will be sold in the IPO are priced at $38 each, which is at the bottom of the $38 – $42 range the company had previously targeted. The newest price point would situate the discount brokerage at a valuation of approximately $32 billion, with the IPO raising about $2.1 billion based on the 55 million shares slated for sale.
The latest price suggests that investors are not as eager to purchase Robinhood’s stock as they may have been with other, more desirable offerings earlier this year. As well, the lower price point also likely reflects the company’s decision to be more conservative with its underwriting, in an effort to ensure the first day of trading commences successfully.
However, Robinhood’s trading debut is anything but ordinary. While most companies traditionally designate a portion of its stock to institutional investors and Wall Street during their IPO, Robinhood has decided to sell nearly one-third of its IPO shares to retail investors via its new technology platform.
Information for this briefing was found via the WSJ. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
