Illustration: Sarah Grillo/Axios
No-fee trading app Robinhood has filed confidential public offering papers, as first reported by Bloomberg and confirmed by Axios.
Why it matters: The move comes just a month after Robinhood came under fire for restricting certain stock trades.
Between the lines: It is unclear if the company plans to conduct a traditional IPO, in which Robinhood would raise capital from the public markets, or do a direct listing, whereby insiders like early investors and employees would reap the proceeds.
Backstory: Robinhood in February restricted the purchases of certain so-called "meme stocks," including GameStop and AMC, following a Reddit-fueled surge in trading activity. The company later said the pauses were driven by collateral requirements by its clearinghouse, although it took days for that explanation to be clearly communicated.
- Robinhood, in the midst of the maelstrom, raised billions of dollars in new capital so as to not run into similar liquidity issues going forward.
- Co-founder and CEO Vlad Tenev was later grilled on Capitol Hill, as part of a House hearing on retail investing.