Robinhood has unveiled a new service that will allow investors to buy shares in a company at its IPO price, before it hits the open market.
- A new Robinhood service will allow investors to buy shares at the IPO price before listing.
- It will allow day traders to invest in IPOs alongside wealthier institutions and investors.
- Robinhood is aiming for its own public listing at the end of June.
- See more stories on the Insider business page.
the Robinhood investment app is rolling out a service that it says will democratize initial public offerings for ordinary investors.
The service, called IPO Access, launched on Thursday and will roll out to all customers over the next few weeks, according to a Press release. The app will allow Robinhood users to buy shares of companies at the IPO price, before the stock starts trading in open markets.
“Most of the IPO shares generally go to wealthier institutions or investors,” Robinhood said in its statement. “With IPO Access, Robinhood’s daily investors will have the chance to enter at the IPO price” with no minimum account.
“Here’s to democratizing IPOs for everyone!” the statement said.
Robinhood – which had 13 million users at the end of 2020 – said the service would allow investors to find out about upcoming IPOs, read financial documents, ask to buy shares at the initial price range quote, then modify or cancel the request when the final price is settled. The company said IPO shares “can be very limited,” but all Robinhood clients could have an equal chance.
Read more: Nikhil Kamath became a 34-year-old billionaire as the founder of the “Robinhood of India”. He told us why Millennials and Gen Z have an investment advantage over their predecessors and shared his tips for retail traders.
Popular trading app plans to reveal deposits for its own IPO from next week after filing a confidential file in March. The company hopes to make its public debut in late June, according to a bloomberg report. Robinhood declined to comment on Insider about its IPO.
Companies have gone public at a record pace since last year. Among the hundreds of companies that have gone public is the dating app Bumble, supplier of vegan milk. Oatly, the Airbnb house-sharing site, and the DoorDash food delivery service.
According to an insider analysis, the increase in public listings was in part fueled by day traders using apps like Robinhood.
Robin Hood came into the spotlight this year when Reddit day traders skyrocketed GameStop’s stock price, forcing pressure on short sellers. The application, which has been criticized for its investment too playful, came under intense scrutiny by users and even by Congress when it halted trading for GameStop and other actions itself.