Robinhood May Sell Shares To Its Own Clients In Upcoming IPO

As a reminder, Bloomberg reported in late 2020 than Robinhood plans to go public as soon as this quarter, after trading volumes on its platform exploded during the coronavirus pandemic and when its clients outperform hedge funds 14-to-1. The company, which focuses on equities, also offers crypto, gold and options trading.

As Bloomberg notes, Robinhood's growth has come with controversy, including a hacking spree that compromised almost 2,000 accounts and flood of complaints to U.S. agencies depicting inexperienced investors losing money. In December, Robinhood paid $65 million to settle SEC allegations that it sold its retail order flow to frontrunning HFT firms such as Citadel. Which, incidentally, is the core business model of the "free" brokerage that is Robinhood which makes its money not through commissions but from selling order flow to market making firms which can front run it and make millions in risk-free dollars each and every day, resulting in a new $100 million house for the likes of Ken Griffin every month.

1 2
View single page >> |

Disclaimer: This is not investment advice. 

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.