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Robinhood Markets Inc (NASDAQ:HOOD) priced its initial public offering at the lower end of the indicated range on Wednesday.
What Happened: The trading platform is pricing 55 million shares in the IPO at $38 each, which is at the lower end of the $38 to $42 range disclosed earlier in a prospectus filed with the U.S. Securities and Exchange Commission.
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The IPO has a greenshoe option that allows underwriters to purchase an additional 5.5 million shares at the offering price.
If the overallotment option is fully exercised, Robinhood could raise as much as $2.3 billion in the IPO. Shares are expected to begin trading on the Nasdaq on Thursday, under the symbol “HOOD.”
Goldman Sachs Group, Inc (NYSE:GS) unit Goldman Sachs & Co. LLC, JPMorgan Chase & Co. (NYSE:JPM) are the lead book-runners for the offering. Additional book-runners include Barclays Plc (NYSE:BCS), Citigroup Inc (NYSE:C), and Wells Fargo & Company (NYSE:WFC) subsidiary Wells Fargo Securities.
Why It Matters: The IPO prices Robinhood, a trading platform favored by retail investors, at $32 billion on a non-diluted basis. The Vladimir Tenev-led company has set aside between 20% and 35% of its IPO shares for such investors who are its app users.
Robinhood anticipates about 841.2 million outstanding shares post-IPO if all overallotment options are exercised.
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See Also: Robinhood Discloses New Regulatory Probe One Day Before IPO
Even so, some retail investors on Reddit forums are less than enthused by Robinhood’s IPO partly due to occurrences earlier in the year. In January, Robinhood limited trading in GameStop Corp (NYSE:GME) and AMC Entertainment Holdings Inc (NYSE:AMC) as retail investors conducted a short squeeze.
Trading in Dogecoin (CRYPTO: DOGE) saw similar halts at the height of the meme coin frenzy.
A viral post on r/Superstonk said, “Robinhood IPO is set to be on the market on Thursday.... DO NOT GO NEAR IT!!!”
“Hood? Their ticker symbol should’ve been ROB,” commented u/nidhaloff on r/WallStreetBets or WSB.
People familiar with the matter told the Wall Street Journal that it isn't just a reflection of investors' hesitation but the lower pricing is also a conscious decision on Robinhood's part — aimed at ensuring a successful first day of trading.
Read Next: Why Robinhood IPO Investors Are Facing 'Alarming Risk'
Photo: Courtesy of Robinhood
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.