The firm was charged with misleading customers on margin trading and other questionable trading practices. And the frequent outages on the platform were also an issue.
In February Robinhood’s CEO, Vlad Tenev was called to testify before the U.S. House Financial Services Committee. Tenev had to defend Robinhood’s role in the GameStop trading mania. The House was critical of payment for order flow. They questioned the subsidy Robinhood receives from market makers. And were critical of the free-trader concept.
Free-trader IPO info
According to its prospectus, by March 2021 Robinhood had 18 million funded accounts, a 151% increase over March of 2020. They have assets of roughly $80 billion, a big surge from the $19.2 billion they held in March 2020.
The company is trying to raise $100 million, in its public offering. And will be trading under the symbol “HOOD” on the Nasdaq.
Robinhood’s S-1 filing with the Securities and Exchange Commission shows it generated net income of $7.45 million on net revenue of $959 million in 2020, compared with a loss of $107 million on $278 million the previous year, according to the filing.