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Illustration: Sarah Grillo/Axios

Popular trading app Robinhood on Thursday filed for its initial public offering, and disclosed that it will set aside up to 35% of shares for retail investors who rarely get to buy at a company's IPO price.

Driving the news: Earlier this week, Robinhood agreed to pay a record $70 million in fines and restitution, as part of a settlement with the Financial Industry Regulatory Authority over providing customers with "false or misleading information."

  • The deal was viewed as key to letting Robinhood "flip" its IPO filing from confidential to public.
  • It plans to list on the Nasdaq under ticker symbol "HOOD."

Background: Today's move also comes several months after Robinhood came under fire for restricting certain trades, related to a burst of activity on GameStop and other meme stocks.

  • The SEC continues to investigate the trading halt, which also sparked Congressional hearings, and Robinhood remains the defendant in several related class action lawsuits.
  • It also was sued by Massachusetts regulators for alleged securities law violations.
  • The SEC also reportedly slowed down Robinhood's IPO process over questions about its growing crypto-trading business, where assets grew from $481 million in Q1 2020 to $11.6 billion in Q1 2021 (aided by a major rise in Dogecoin trades).

Share set-aside: Robinhood says that between 20% and 35% of its shares will be allocated for sale to company customers, most of whom are retail investors, at the IPO price.

ROI: Robinhood has raised over $5.5 billion since being founded in 2013, including $3.4 billion via a convertible note investment in the aftermath of the trading fiasco.

  • Major VC backers include DST Global, Ribbit Capital, Index Ventures and NEA.

Financials: The Silicon Valley company reports a $1.44 billion net loss on $522 million in revenue for the first three months of 2021, but the entire loss was tied to a fair market value adjustment to the convertible note financing.

  • It reported a $52 million net loss on $128 million in revenue for Q1 2020, and a $7.5 million profit on $959 million in revenue.

Go deeper

Felix Salmon, author of Capital
Jun 30, 2021 - Economy & Business

Revealed: How Robinhood harmed millions of its customers

Illustration: Sarah Grillo/Axios

Robinhood lied to its customers for years, costing them millions of dollars and breaking numerous regulatory rules, according to a blockbuster disciplinary action revealed on Tuesday by the Financial Industry Regulatory Authority, the brokerage's chief regulator.

Why it matters: Robinhood burst onto a relatively sleepy discount-brokerage scene by offering disruptive mobile-native free stock trading. Finra's complaint, coupled with a record $70 million in fines and restitution, reveals the degree to which Robinhood failed at core components of what a brokerage must be able to do.

Chinese ride-hailing giant Didi reportedly prices IPO shares at $14

Signage outside the Didi Chuxing Technology Co. offices in Hangzhou, China. Photo: Qilai Shen/Bloomberg via Getty Images

Chinese ride-hailing company Didi priced its initial public offering at the top of its range at $14, according to media reports. The company is reportedly considering selling more shares than planned to raise more than $4 billion, and giving it a market cap of at least $67 billion.

Why it matters: Didi will be the second largest U.S. IPO by a Chinese company after Alibaba, which raised about $25 billion from investors in 2014. Didi also famously acquired Uber's Chinese business after an expensive battle to win the market.

Colossal ride-hailing company Didi goes public

Didi President Liu Qing (R) and CEO Cheng Wei in Beijing. Photo: Xin Yue/Huanqiu.com/VCG via Getty Images

Chinese ride-hailing company Didi Chuxing started trading on the New York Stock Exchange Wednesday — popping nearly 19% from its $14 IPO price.

Why it matters: Didi’s debut makes it one of SoftBank’s biggest exits. Masayoshi Son’s Vision Fund is the company’s biggest investor with a roughly 20% stake in the company.