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How to Buy Robinhood IPO Stock

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Despite a controversial start to the new year, fintech startup Robinhood recently filed for its highly anticipated IPO and now the commission-free brokerage plans to allow users the chance to buy shares before they debut. Robinhood is building a platform that will democratize the IPO process and allow its customers the chance to buy IPOs early, including its own.

A pioneer in the realm of commission-free and accessible investing, Robinhood provides margin lending services, access to options trading, cryptocurrency market access and more. 

Though the company’s 2021 decision to halt trading on GameStop, AMC Theaters and other hot stocks triggered several lawsuits, the company will proceed with its IPO offering with assistance from Goldman Sachs. The broker will use a direct listing or assistance from a special purpose acquisition company (SPAC).

Many details of Robinhood’s future IPO remain up in the air but preparing now can help when Robinhood does enter the market. Learn more about how to buy stocks and how you can participate in Robinhood’s upcoming IPO with our quick guide for beginners. 

When is the Robinhood IPO Date?

Though Robinhood seems prepared to move forward with its 2021 IPO, the company has not yet set an official date on a launch for retail investors. Sources close to the brokerage initially speculated that the company would hold its IPO in May of 2021 but these plans may change due to the company’s current investigation of trading halts placed on popular stocks amid a short squeeze that took place in January and February 2021.  

Robinhood Financial History

The company, founded in April of 2013, acquired its first major round of funding in 2015 with a $66 million cash boost from New Enterprise Associates (NEA) and existing investors like Index Ventures, Ribbit Capital and Social Leverage. In April of 2017, Robinhood raised $110 million in venture capital funding and in 2018, the company closed on a round of Series D financing led by DST Global to the tune of $363 million. 

In addition to a long history of successful fundraising efforts, Robinhood’s steadily growing valuation data should please potential investors.  

Robinhood’s valuation has steadily grown since its $1.3 billion valuation in April of 2017. In 2020, the company received a valuation of $8.3 billion led by Sequoia Capital. The broker claims to have 13 million users in 2020, but this number may climb higher, thanks to an influx of new users emerging from the COVID-19 pandemic. 

Robinhood Potential

Though Robinhood advertises itself as a free app, it brings income through a variety of channels. The most controversial of these channels: its practice of selling users order information to high-frequency traders. Robinhood faced an SEC investigation in September of 2020 over its early failure to disclose information sales practices. Robinhood has also been in the news as early as January 2021, after it felt the weight of steep collateral costs during the highly-publicized GameStop stock short squeeze.

Despite this current controversy, it seems like an ideal time for Robinhood to finally enter the public sphere. Robinhood has momentum thanks to the influx of millions of new users brought to the simple app by the onset of the COVID-19 pandemic. Ideally, the broker will retain these customers and parlay its enhanced user base toward a positive public offering. 

How to Buy Robinhood IPO Stock

If you already have a brokerage account and you know how to buy and sell shares of stock, investing in Robinhood’s upcoming IPO will look the same to you. If you don’t already know how to invest in the stock market, our guide for beginners will help you get started today so you’ll know what to do when Robinhood announces its IPO date. 

Step 1: Pick a brokerage.

Before you can invest in IPOs or trade stocks, you’ll need a brokerage account. A brokerage account is an online trading account provided by a financial service company that allows you to participate in the market by placing buy and sell orders. If you already have a brokerage account, you likely won’t need to open a new account to participate in Robinhood’s IPO, as the broker will likely begin trading on the Nasdaq. If you don’t already have a brokerage account, consider starting your search with a few of our favorite account providers below. 

Best For
Intermediate Traders and Investors
Overall Rating
Get started securely through Webull’s website
Best For
Intermediate Traders and Investors
N/A
1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • Commission-free trading in over 5,000 different stocks and ETFs
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Leverage of 4:1 on margin trades made the same day and leverage of 2:1 on trades held overnight
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in mutual funds, bonds or OTC stocks
Best For
Beginners
Overall Rating
get started securely through Robinhood’s website
Best For
Beginners
N/A
1 Minute Review

Robinhood is the broker for traders who want a simple, easy-to-understand layout without all the bells and whistles other brokers offer. Though its trading options and account types are limited, even an absolute beginner can quickly master Robinhood’s intuitive and streamlined platform. On the other hand, more advanced traders might be frustrated by Robinhood’s lack of technical analysis tools, a feature that’s now nearly universal across other platforms.

Best For
  • Beginner traders
  • Mobile traders
Pros
  • Streamlined, easy-to-understand interface
  • Mobile app with full capabilities
  • Can buy and sell cryptocurrency
Cons
  • Almost no trading analysis tools available
  • Only taxable brokerage accounts available
  • No option to open a retirement account
  • No access to mutual funds, forex or futures trading
  • Limited customer service
Best For
Options Trading
Overall Rating
Get started securely through TD Ameritrade’s website
Best For
Options Trading
N/A
1 Minute Review

This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.

Best For
  • Novice investors
  • Retirement savers
  • Day traders
Pros
  • World-class trading platforms
  • Detailed research reports and Education Center
  • Assets ranging from stocks and ETFs to derivatives like futures and options
Cons
  • Thinkorswim can be overwhelming to inexperienced traders
  • Derivatives trading more costly than some competitors
  • Expensive margin rates
Best For
Inexpensive Options Trading
Overall Rating
get started securely through Tradier’s website
Best For
Inexpensive Options Trading
N/A
1 Minute Review

Tradier is a high-tech broker made with the most active traders in mind. Tradier differentiates itself by using Application Programming Interface (API) technology to partner with popular trading software to offer a wide range of platform choices to Investors. Tradier brokerage offers integration with one of the widest ranges of platforms we’ve seen, including Esignal, Orion Multi Trader, Stockstotrade, 1Option, Evati, and many, many more. 

Tradier offers 2 pricing options — infrequent traders may want to opt for Tradier’s 0 Stocks and $0.35 per Options contract trading, while very active traders can often save money by opting into Tradier’s $30 monthly all-inclusive option and Equity, which cuts commissions entirely.

Tradier TradeHawk platform is exceptionally impressive, combining intuitive 1-click order placements with a vast range of indicators and charting tools. TradeHawk is also completely compatible with both Apple and Android mobile devices. Though we’d love to see Tradier expand into mutual funds and offer a bit more in the way of educational tools, the broker remains a top choice for advanced traders and those looking for enhanced customization options.

Best For
  • Very active options traders who would benefit from a flat-rate monthly charge instead of per-contract fees.
  • Advanced traders looking for a customizable broker with a wide range of platforms that can be integrated.
  • Prominent options traders get high-quality execution, real-time market data and subscription trading.
Pros
  • Wide range of integrated platforms provide an option for any trader.
  • All-inclusive per-month subscriptions available in lieu of per-contract commissions can potentially save very active traders hundreds of dollars a month.
  • Platforms are powered by quality real-time market data and execution.
  • Paper trading and Sandbox building mode allows particularly tech-savvy traders to create a platform and strategies customized to their preferences and needs.
  • Exceptionally affordable margin rates.
Cons
  • While good for active traders, newer traders may prefer a platform with fewer integration choices and a more streamlined approach.
  • No online mutual funds currently available.

Step 2: Decide how many shares you want.

You might find it challenging to determine how many shares of Robinhood’s IPO stock you want to buy because the company hasn’t yet announced how it will go public. If Robinhood follows the lead of other early 2021 IPOs and chooses a direct listing, it means that shares of stock will sell at whatever price the market determines based on investor behavior.

You may decide how much you want to invest in Robinhood’s IPO based on your own finances, not the share price of the stock. It’s normal for IPO stocks to dip in value after the first day of trading, so you may only want to invest on the date of the offering if you want to hold onto Robinhood’s stock for a longer period of time. Don’t worry if you can only afford to invest a few dollars — most brokers now allow you to invest in fractional shares based on the amount of money you have in your brokerage account.

Step 3: Choose your order type.

When you fully open and fund your account, you can place an order to buy any share of stock supported on the brokerage platform. The price you’ll pay and the time when your order fills will vary depending on the order type you choose. The best brokers offer access to a multitude of order types. Take a look at a few of the most common order types you might have access to:

  • Market order: A market order executes as soon as possible at the current market rate. Though market orders give you little control over the price you pay per share of stock you buy, they’re the most likely type of order to fill.
  • Limit order: A limit order executes at or below a “limit price” you specify when you place the order. For example, if shares of Robinhood stock trade at $100 a share and you set a limit price of $98, your broker would only fill the order if the price per share fell to $98 or below. Limit orders allow you to control the price your order is filled but these orders may not be filled if limit conditions aren’t met.
  • Stop order: A stop order executes as a market order once the stock you buy reaches a certain price. Stop orders work for you if you aren’t sure that a stock is going to break through a sell wall.
  • Recurring order: Select brokers allow you to place recurring orders, which execute at future intervals specified by you. This works well if you want to automate your investments.

Your broker may offer all of these order types or a selection of them, depending on the company you work with. Many brokers also offer access to more advanced order types.  

Step 4: Execute your trade. 

Your broker will fill the order according to the price instructions you chose when you placed the order. If your broker cannot fill your order (for example, because the stop price you indicated was never reached) the broker may leave the order open or cancel the order at the end of the trading day. If your broker can complete your order, you’ll see your shares in your brokerage account. Most brokers will also send an email, SMS or push notification informing you when your order is complete. 

Prepare for Robinhood’s IPO

Robinhood’s upcoming IPO might be one of the most anticipated offerings of the year. If you want to make sure that your order fills during the day of the IPO, we recommend using a market order to secure your shares. If you only want to buy into Robinhood as a long-term investment, you may want to wait a day or so after the IPO to buy your shares. Even highly popular IPOs tend to decline in price on the day of their opening. 

Turn to Webull

0 Commissions and no deposit minimums. Everyone gets smart tools for smart investing. Webull supports full extended hours trading, which includes full pre-market (4:00 AM - 9:30 AM ET) and after hours (4:00 PM - 8:00 PM ET) sessions. Webull Financial LLC is registered with and regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is also a member of the SIPC, which protects (up to $500,000, which includes a $250,000 limit for cash) against the loss of cash and securities held by a customer at a financially-troubled SIPC-member brokerage firm.