Robinhood, the American no-cost trading platform, has just announced its future IPO. A maneuver that reflects the strong interest of Americans in stock market activity since the start of the pandemic.
Founded in 2013, Robinhood is an American company whose goal is to democratize the online stock market. The founders of the startup realizing that the large companies on Wall Street paid nothing to trade in stocks, they decided to create a mobile trading application with no fees. Indeed, unlike other similar services which charge a commission on orders to buy or sell shares on the stock market, Robinhood does not take any and is remunerated via other mechanisms such as ‘obtaining loans.
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Presumably galvanized by all the buzz around the platform, the company said on Tuesday it had confidentially filed for an IPO. The application has indeed taken full advantage of the lockdown that has prompted millions of Americans to use their savings and time to try their hand at trading. A winning bet, since according to Bloomberg, the company with 13 million users, could be valued at 40 billion dollars (33.92 billion euros) when it goes public. The introduction is expected to take place on Nasdaq by the end of the second quarter of 2021.
However, the operation is not without risk. For example, the application has experienced many setbacks this year which, although it has been talked about, have limited its expansion in other countries (it is only available in the United States at present). For example, the company has alienated some of its customers after unexpectedly halting trading in Gamestop shares in January. On June 12, a 20-year-old student committed suicide after his Robinhood account posted a negative balance of $ 730,165. ” How did a 20-year-old with no income get credit for nearly a million dollars? He wrote on a note left on his computer. These setbacks show that some Internet users have not taken into account the risks associated with online investment, which could eventually attract the eye of the American authorities.
The company, which has yet to release official figures on its results, has still managed to motivate many Internet users to try online brokerage, thus validating its commission-free strategy approach. But like any young startup, it must secure its approach.