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To: Glenn Petersen who wrote (179)6/23/2021 11:17:30 PM
From: Thehammer
   of 196
 
I suspect you are right. I think the minimum investment was 10K - that and the carried interest / fees turned me off.

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From: Sr K6/24/2021 11:38:27 AM
   of 196
 
V hit ATH.

Visa Buys Swedish Fintech Tink for More Than $2 Billion

Tink would give Visa a foothold in open banking, which connects consumers to multiple financial institutions

wsj.com


Tink was founded by CEO Daniel Kjellén, wearing blue shirt, and CTO Fredrik Hedberg.PHOTO: CLAUDIO BRESCIANI/ZUMA PRESS

By
Simon Clark

June 24, 2021 5:58 am ET

Visa Inc. agreed to pay more than $2 billion for Tink, a Swedish startup whose digital services connect more than 3,400 banks and financial institutions in Europe.

The largest U.S. card network is buying the financial-technology company to establish itself in Europe’s fast-growing open banking market. Open banking regulation in the European Union and U.K. enables financial companies to access customers and their data at competing institutions, if the customers have granted consent.

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From: Glenn Petersen6/25/2021 10:58:21 AM
1 Recommendation   of 196
 
SEC Delays Robinhood's IPO Plans Due to Crypto Business

Robinhood has had to push its IPO date back to next month as the SEC takes a closer look at the firm’s cryptocurrency operations.

By Liam J. Kelly
Decrypt
2 min read
Jun 25, 2021

In brief

-- Robinhood filed for a confidential IPO on March 23, 2021, but additional details about the offering have yet to be revealed.

-- The SEC has now delayed the IPO further, citing continued review into the company's crypto business.

The hyper-popular retail trading app Robinhood has had a massive year so far. But its IPO plans have hit a snag, according to a Bloomberg report.

The U.S. Securities and Exchange Commission (SEC) is reportedly taking a closer look at the company’s cryptocurrency operations. Alongside traditional stocks, Robinhood traders can also trade a handful of cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin.

The additional scrutiny has pushed back the company’s IPO date to next month, however, a source close to the matter said that the event could be pushed back as far as this fall.

Robinhood's crypto ambitions

Robinhood’s CEO, Vlad Tenev, has made the company’s cryptocurrency operations a key focus this year. In a recent interview, Tenev said that Robinhood is seeking to “make a huge investment and hire a ton of people” to build out these operations. The renewed focus on crypto came after a nearly six-fold increase in the number of users who traded cryptocurrencies, from 1.7 million in Q4 of 2020 to 9.5 million in Q1 of 2021.

Still, this part of the firm’s business has struggled to keep up with demand. When SpaceX and Tesla CEO Elon Musk appeared on Saturday Night Live, triggering an unexpected sell-off in Dogecoin, Robinhood users were unable to buy or sell the premier meme coin. This was just one week after a similar outage on the platform for the same cryptocurrency.

Outages on Robinhood and crypto’s infamous volatility have now culminated in a closer inspection from America’s lead regulator.

Meanwhile, the leading cryptocurrency in Bitcoin has fallen far from its highs of $64,000 last month. Today, Bitcoin is trading at $34,219, up 4.2% in the last 24 hours, according to Nomics.

SEC Delays Robinhood's IPO Plans Due to Crypto Business - Decrypt

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From: Glenn Petersen7/1/2021 10:12:33 PM
   of 196
 
Robinhood Spreads the Wealth and Takes a Risk

The retail broker can live up to its ethos of democratizing finance by selling its customers its IPO, but the move is a gamble if the shares perform poorly or if it faces technical snafus

By Telis Demos
Wall Street Journal
July 1, 2021 7:10 pm ET



Investors big and small will be best served by staying focused on Robinhood’s underlying economics. PHOTO: GABBY JONES/BLOOMBERG NEWS
----------------------------------------------

Robinhood Markets is going public and bringing some friends along for the ride.

The red-hot online brokerage filed paperwork Thursday for its long-anticipated initial public offering. It revealed that it may reserve approximately 20% to 35% of its offering for its own customers. For investors who are trying to evaluate this deal, it is hard to figure what that means regarding how Robinhood’s shares might trade.

If Robinhood is able to price its shares at a strong valuation and see them “pop” after they begin trading, such an occurrence could bolster the company’s argument that it is a democratizing force in markets—that letting retail into the IPO club is good for both issuers and small investors. It also would be an advertisement for the business itself—particularly Robinhood’s nascent IPO Access platform, through which it will offer the shares.

On the other hand, a messy IPO that prices poorly and fails to deliver a pop could, fairly or not, reinforce skeptics’ view that small investors are fickle, or that Robinhood isn’t ultimately on the little guy’s side.

History has many examples of the various outcomes involved in IPOs with customer set-asides. Sometimes there are technical issues. Many in the IPO business still remember the 2006 debut of the telecom firm Vonage, whose customer stock allocation was marred by complaints about the process. As far as how shares ultimately perform in early trading, there are examples on both sides recently. Uber Technologies set aside shares for some of its drivers, and its IPO dipped in first-day trading. Airbnb, however, set aside shares for hosts and saw its stock skyrocket and more than double when it opened for trading.

Companies and their bankers to some degree can try to affect the likelihood of a pop by aiming to price below what they know many investors are willing to pay. Of course, that means the company itself could leave more “money on the table” that it could have raised in the deal, and it isn’t clear yet how much money Robinhood might be seeking to raise in the IPO. Pricing science might even be a moot point at first given retail traders’ recent abandonment of fundamental valuation measures with the “meme stocks.”

Longer term, this all likely means quite little. Facebook allocated about a quarter of its IPO to retail investors, and its shares fell early on. The stock is now worth more than nine times the offering price. Ultimately, then, perhaps a stock’s debut performance is more about valuation and market conditions than about allocation strategy.

Investors big and small will be best served by staying focused on Robinhood’s underlying economics, even in the midst of all the hoopla. The numbers are the only friend you need.

Write to Telis Demos at telis.demos@wsj.com

Robinhood Spreads the Wealth and Takes a Risk - WSJ

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From: Sr K7/4/2021 9:18:12 AM
1 Recommendation   of 196
 
China’s Internet Regulator Finds Serious Problems With Didi China Unit’s App

Cyberspace Administration cites illegal collection of personal data and orders app-store operators to remove ride-hailing giant’s app


China’s internet regulator said Sunday that Didi’s app has serious problems involving illegal collection of personal data.PHOTO: ALEX PLAVEVSKI/SHUTTERSTOCK

By
Yoko Kubota

July 4, 2021 8:37 am ET

China’s internet regulator, the Cyberspace Administration of China, said Sunday that it had ordered app-store operators to remove ride-hailing giant Didi Global Inc.’s app and that the app has serious problems involving illegal collection of personal data.

Write to Yoko Kubota at yoko.kubota@wsj.com

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From: Glenn Petersen7/5/2021 4:49:29 AM
   of 196
 
Robinhood vs Coinbase: The Coming Clash

Robinhood's crypto ambitions mean it's poised to be Coinbase's biggest rival.

By Jeff John Roberts
Decrypt
4 min read
Jul 3, 2021

When Robinhood filed its papers to go public this week, it revealed a lot about its crypto operations.

The popular quick-swipe trading app reported over $11 billion in Bitcoin and other digital holdings for its customers, and revealed that 6% of its Q1 revenue came from Dogecoin alone. And this is just the beginning: In the coming year, Robinhood plans to let customers move crypto off and on its platform—just like the pure-play crypto companies allow.

This is all good news for crypto fans, in part because Robinhood is attracting new users to crypto in droves. The more people who embrace crypto, the more valuable it will become (hypothetically), and the more innovation will take place.

But there's one company that isn't thrilled about Robinhood's crypto rise: Coinbase.

Coinbase is hands-down the best known crypto brand among U.S. retail investors—a market it has had almost to itself for a while now. Sure, Binance is the world's biggest crypto firm, but its core customers are international users or professional traders. Kraken also focuses on institutions and pro traders. Gemini, the exchange of the Winklevoss brothers, has tried to nibble into Coinbase's customer base, but remains a relative minnow.

Robinhood, on the other hand, is poised to be a major headache for Coinbase.

The app already has more than 18 million customers with funded accounts (and that number will grow), and Robinhood is already persuading many of them to give crypto a try (9.5 million Robinhood customers traded crypto in Q1). What's more, many of these customers are part of what media outlets like the FT call "the retail army," a legion of like-minded people who enjoy memes and like to place crazy bets on long-shot stocks. They overlap heavily with the crypto crowd.

Meanwhile, a person familiar with Robinhood tells Decrypt the company is moving into high gear with plans for a full-blown crypto wallet that could also serve as a bridge into the world of DeFi, the Lego-like series of protocols and pools that many believe will form the future of finance. Building these tools is no joke—it's why a lot of companies choose to outsource the back-end of their crypto operations—but Robinhood has the money and the know-how to pull it off. Note that it has already accomplished the difficult feat of building its own clearing house.

And then there are the fees. Coinbase continues to charge retail users around $3 a trade, betting that the fee is low enough and its platform is sticky enough that those users won't bolt. Robinhood, on the other hand, built itself around no-fee trading fees, and its millions of customers have come to view zero as a normal. What happens if Robinhood starts offering additional incentives to Coinbase customers—many of whom have Robinhood accounts already for their stocks—to move their crypto over?

Coinbase, of course, is watching the developments at Robinhood closely, and is not going to stand by and get beat at its own game. The best known brand in crypto is rolling out a growing suite of products—including NFTs and high-yield savings accounts—and, as technology to trade stocks on the blockchain improves, is likely to move on to Robinhood's turf and offer its customers access to traditional stocks.

This growing rivalry is also going to spark some interesting alliances in the crypto space. Will Robinhood partner with the likes of Gemini and Galaxy in order to gang up on Coinbase? Will Coinbase buy or invest in one of Robinhood's smaller stock trading competitors? We shall see.

In the meantime, it's enough to note that Robinhood should be added to the list of Coinbase competitors with the likes of Binance and Kraken. Or better yet, add it to the top of that list.

Robinhood vs Coinbase: The Coming Clash - Decrypt

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To: Sr K who wrote (184)7/5/2021 4:56:04 AM
From: Glenn Petersen
   of 196
 
Tuesday should be an interesting day for DIDI.

Beijing’s Blocking of Didi App Sends Peers Tumbling in Hong Kong




Beijing’s Blocking of Didi App Sends Peers Tumbling in Hong Kong
--------------------

(Bloomberg) -- Shares of Chinese technology companies slid in Hong Kong as investors stepped back to gauge the impact from Beijing’s move to block ride-hailing giant Didi Chuxing from app stores due to data security issues.

Tencent Holdings Ltd., which has a stake in Didi, slumped 3.6% in Hong Kong to erase its year-to-date gain. Meituan, ordered by China’s antitrust watchdog to rectify practices in May, lost 5.6%, while the Hang Seng Tech Index slid 2.3% to its lowest level since May 17.

“It’s clear that there’s a regulatory overhang on China’s tech giants at the moment and that may continue to weigh on sector valuations for the large internet platforms,” according to Matthew Kanterman, an analyst at Bloomberg Intelligence.

The sector is also facing increased selling pressure from technical traders after the Hang Seng Tech Index formed a bearish signal, dubbed as a death cross, when its 50-day moving average fell below the 200-day moving average in May.

Shares of Didi Global Inc. tumbled in New York on Friday after China said it’s starting a cybersecurity review of the company, just two days after it pulled off one of the biggest U.S. stock market debuts of the past decade. The Cyberspace Administration of China announced the app ban Sunday, citing serious violations on Didi Global’s collection and usage of personal information, without elaborating.

“The new challenges on data security and privacy and ownership and use is a bigger question as it is the monetisation of this data that is the key to these companies’ earnings,” said Joshua Crabb, a senior portfolio manager at Robeco in Hong Kong. “If that becomes at risk, the earnings and hence stock price implications could be much more dramatic than the antitrust fines we have seen so far.”

Didi’s hoard of personal data poses a threat to individual privacy as well as national security, the Global Times said in a Monday commentary that lauded China’s scrutiny of the ride-hailing giant. Also on Monday, the watchdog started cybersecurity reviews on several cargo, hiring platforms.

READ: SoftBank Tumbles as China Blocks Didi App Just Days After IPO

(Updates with closing prices.)

More stories like this are available on bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.

Beijing’s Blocking of Didi App Sends Peers Tumbling in Hong Kong (yahoo.com)

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From: Glenn Petersen7/19/2021 7:24:22 AM
   of 196
 
Robinhood is seeking a market valuation as high as $35 billion in upcoming IPO

PUBLISHED MON, JUL 19 20217:07 AM EDTUPDATED 2 MIN AGO
Maggie Fitzgerald @MKMFITZGERALD
CNBC.com

This is a developing story. Check back for updates.

Robinhood is seeking a market valuation of as much as $35 billion in its upcoming initial public offering, according to an amended SEC filing.

The stock trading company will seek to sell at a range of $38 to $42 per share, according to the filing. The company is looking to sell 55 million shares at that range to raise as much as $2.3 billion.

Robinhood — which plans to trade under the symbol “HOOD” on the Nasdaq — also updated several of its financial and user metrics in the updated filing. The company estimates it has 22.5 million funded accounts, up from 18 million in the first quarter of 2021.

The Menlo Park, California-based free-trading pioneer estimates second quarter 2021 revenue between $546 million and $574 million. This would be an 129% increase in revenue from the $244 million made in the second quarter of 2020. The company generated $522 million in revenue in the first quarter if 2021.

Robinhood is seeking a market valuation as high as $35 billion in upcoming IPO (cnbc.com)

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From: Glenn Petersen7/25/2021 3:40:51 PM
   of 196
 
Coming soon...the first meme IPO:

Robinhood’s IPO roadshow answered questions I wasn’t asking

“What’s your favorite planet?”

By Elizabeth Lopatto @mslopatto
The Verge
Jul 24, 2021, 4:39pm EDT

“What’s your favorite planet?” is a real question that Robinhood execs really picked to answer during the Q&A section of its retail investor roadshow.

“Definitely Pluto,” says long-haired CEO Vlad Tenev. He is having a good time. He goes on to explain that there will be a great view of Venus tonight after sunset.

Many of the questions the management picked have been lackluster; asked if Robinhood will add a customer support line, Tenev cheerily explains there already is one. Another question is wasted on whether the stock will pay dividends — anyone who read the prospectus knows the answer is no.

I am watching this roadshow — my first, and the first, I suspect, of many who are watching — because Robinhood plans to sell as much as a third of its IPO to its users. The roadshow is part of a plan to put retail investors on an “equal footing” (per the prospectus) with institutional investors. At the top of the presentation, I’m told that this is basically the same set of materials institutional investors get.

And why am I spending my Saturday on this? Well, it’s going to be the first meme IPO. And if this works, other companies may choose to boost the proportion of their shares they allocate to retail investors, says Pitchbook’s Robert Le, a senior analyst. Most IPOs allocate only 1 percent to 3 percent of their shares to retail investors, he says. If Robinhood ends its first day of trading higher than where it started, other companies may follow in its footsteps. However, if the stock trends down, institutional investors may steer clear of IPOs that include a large chunk of retail traders, Le says in an email.

Robinhood hasn’t offered its investors IPO access before, and that concerns David Erickson, who was co-head of global equity capital markets at Barclays until he retired in 2013. (He is now a lecturer at Wharton Business School at the University of Pennsylvania.) “They don’t have the best internal controls,” Erickson says in an interview, pointing to Robinhood’s history of outages. “For a company supposed to be in the business of keeping your money secure, they aren’t necessarily doing a good job of that.”

During the roadshow, Tenev, his cofounder Baiju Bhatt — who is also rocking some lustrous locks — and CFO Jason Warnick appear to be in an expensive and uncomfortable facsimile of a living room. They are seated on a white couch, with random wooden slats behind them; plants hang from the slats. In front of them, there are small wooden tables. Bhatt and Warnick are clearly reading from teleprompters. Many speakers featured on the call wore a pin of Robinhood’s feather logo — but not Tenev.

There were real, substantive questions eventually. Though Robinhood doesn’t give a timeline, it is apparently working on creating wallets for its cryptocurrency users, allowing them to transfer in their crypto from elsewhere. Eventually there will be a beta, but because it’s impossible to recover cryptocurrency if it’s been handled wrong, Robinhood is proceeding slowly, Tenev says.

And as for payment for order flow, which makes up 81 percent of the first quarter revenue in 2021, Robinhood plans to work with regulators to answer concerns. This sounds suspiciously like Robinhood is planning to lobby — and it may also explain the former SEC employees hired at Robinhood. As for the angry meme stock customers that might leave? Tenev dodges the question. Outages? Well, Robinhood says it’s investing resources to create redundancies so they won’t keep happening. (We’ll see!)

The most interesting remarks are saved for the end. First, Robinhood is considering IRAs and Roth IRAs, two types of retirement accounts, as products it may offer. (Whether people want to save for retirement on their fun gambling app is an open question, but sure!) Second, Robinhood thinks that retail investors are in the market to stay; it’s working to diversify by building out Robinhood Gold, its paid product, as well as cash management, more cryptocurrency offerings and fully paid securities lending.

There is one notable omission in the roadshow. Despite its lovey-dovey mission statement about democratizing finance, the founders’ Class B stock gets 10 votes per share, while IPO investors’ Class A stock gets just one vote per share. Erickson, the Wharton lecturer, doesn’t like that, either. “This one bothers me like WeWork bothered me,” he says.

Robinhood’s IPO roadshow answered questions I wasn’t asking - The Verge

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From: Glenn Petersen7/28/2021 12:32:59 PM
1 Recommendation   of 196
 
Robinhood starts trading Thursday. Here’s everything investors need to know

PUBLISHED WED, JUL 28 202111:23 AM EDT
UPDATED 17 MIN AGO
Maggie Fitzgerald @MKMFITZGERALD
CNBC.com

Robinhood is scheduled to hit the markets Thursday in one of the most highly anticipated initial public offerings of the year.

The stock trading app will trade on the Nasdaq under ticker HOOD, priced at an expected $38 to $42 per share. Robinhood is looking to sell 55 million shares at that range to raise as much as $2.3 billion, and the share sale is expected after the close Wednesday.

At the top end of the range, Robinhood would be valued at $35 billion, and the co-founders would each own stakes worth about $2.8 billion. Coinbase, which went public in April, has a fully diluted market capitalization of $65 billion. The apps are among the most popular places for consumers to by cryptocurrencies, which have surged in trading in 2021.

Robinhood, whose longstanding mission is to democratize investing, is seen as the main gateway to the markets for young investors.

The free-trading pioneer has experienced explosive growth in the past few years amid a boom in retail trading. The company estimates its 18 million retail clients and more than $80 billion in customer assets in the first quarter ballooned to 22.5 million users and more than $100 billion in the second quarter of 2021.

Robinhood is the third-largest brokerage based on number of funded accounts, behind Fidelity and Charles Schwab, which purchased TD Ameritrade last year.

Robinhood went after a largely underserved demographic in the retail investing space, providing a significant runway for growth, according to Autonomous Research analyst Christian Bolu. The Menlo Park, California-based app pioneered free trading and forced the brokerage industry to drop commissions in 2019.

“Robinhood serves the [approximately 84 million] U.S. households with [less than $100,000] in wealth that existing retail brokers have largely ignored,” Bolu wrote in a research report. “We size the money app opportunity at [about $120 billion] in revenues implying Robinhood has a significant runway for growth.”

While Robinhood was successful in acquiring clients who were largely left behind by legacy brokerages, their account balances are lower compared with peers, which should give Robinhood a lower valuation, according to MKM Partners.

Robinhood’s IPO pricing implies a roughly $1,350 valuation per active and funded account, based on its estimated 22.5 million accounts as of the second quarter of 2021.

This compares with $2,500 per account for E-Trade, which was purchased by Morgan Stanley, and $2,200 per account for each TD Ameritrade account, based on Schwab’s purchase price, according to the MKM analysis. Autonomous Research estimates Schwab accounts are worth more than $3,600 per funded account.


An unorthodox IPO

Robinhood’s longstanding mission is to lower the barrier to enter the world of finance, and its IPO has been nothing but on brand.

The stock trading app is reserving 20% to 35% of its IPO shares for its own clients, which CEO Vlad Tenev said he expects will be one of the largest retail allocations ever.

IPO shares have historically been set aside for Wall Street’s institutional investors or high-net-worth individuals. Retail traders typically don’t have a way to buy into newly listed companies until those shares begin trading on an exchange, so they miss out on the pop.

However, some analysts said Robinhood may be leaving itself exposed to the whims of the very amateur investors it’s trying to help.

“There’s no doubt that retail traders are much more fickle. The more [Robinhood] sells to retail, the more susceptible they will be to some sort of Reddit super squeeze type of activity,” Greg Martin, managing director and co-owner at Rainmaker Securities, told CNBC earlier this month.

Robinhood’s loose lock-up structure is also unconventional. Employees will be able to sell 15% of their shares immediately after the public debut, compared with the traditional six-month lockup period. After three months, investors can sell another 15%.

Robinhood even had a public virtual roadshow over the weekend, an event historically reserved for investment banks and high-net-worth individuals. The company’s executives invited everyday investors to join the call and spoke on topics from a pool of 2,000 questions.

David Erickson, a finance professor at the University of Pennsylvania’s Wharton School, said investment banks typically don’t like novelty in the IPO process. However, Robinhood is such a high-profile IPO that it’s worth it for the underwriters. Goldman Sachs and JPMorgan are the lead bankers on the deal.

Robinhood is the latest company to change the structure of public offerings. The traditional IPO is rapidly becoming a thing of the past amid the rise in direct listings and special purpose acquisition companies.

?I am betting that several of these institutional investors will take a pass especially at a significant valuation step-up from just a few months ago,” Erickson said.

Robinhood will likely be the seventh IPO of 2021 to raise more than $2 billion. The six prior ones are trading below their IPO prices.

Robinhood co-founders Tenev and Baiju Bhatt each are planning to sell about $50 million worth of shares in the IPO. Top investors include DST Global, which owns about 9% of Robinhood pre-IPO. Index Ventures has roughly 13%, NEA has about 13% and Ribbit Capital has approximately 10% of pre-IPO ownership.

Trading slowdown and regulatory risks

Robinhood warned in its updated prospectus that the brokerage could see a slowdown in its epic growth as the retail trading boom cools.

“We expect our revenue for the three months ending September 30, 2021, to be lower, as compared to the three months ended June 30, 2021, as a result of decreased levels of trading activity relative to the record highs in trading activity, particularly in cryptocurrencies, during the three months ended June 30, 2021, and expected seasonality,” Robinhood said in an amended prospectus released last week.

Robinhood, which offers equity, cryptocurrency and options trading, as well as cash management accounts, benefits from more speculative trading practices from its clients. Options trading makes up about 38% of revenue, while crypto is 17% of revenue. Plus, margin and stock lending trading levels have been elevated in 2021.

“Since the lion’s share of Robinhood’s revenue is derived from transactional activity there is a risk that a market downturn or even less turnover could lead to top-line pressures,” said Peter Hobson, senior analyst at Third Bridge. “The last time there was similar gangbusters retail trading growth was in early 2000, which then saw a material decline in retail trading activity after the pop of the dot-com bubble.”

Robinhood also said it anticipates the growth rate of new clients will be lower in the third quarter of 2021 from second quarter “due to the exceptionally strong interest in trading, particularly in cryptocurrencies, we experienced in the three months ended June 30, 2021 and seasonality in overall trading activities,” the filing said.

“It is unclear to us whether the new influx of customers at HOOD will continue to be repeat traders or would behave differently from prior cohorts of users. Approximately 60% of funded accounts on Robinhood were opened in the last 12 months, and a vast majority of them are first-time investors,” said MKM Partners analyst Rohit Kulkarni.

Another major risk to Robinhood’s valuation would be regulatory changes to the firm’s largest revenue source, payment-for-order flow, or the money-brokerage firms receive for directing clients’ trades to market makers. Payment-for-order flow is a controversial practice that has garnered attention from the Financial Industry Regulatory Authority and Main Street.

In the first quarter of 2021, Robinhood found itself in the middle of a firestorm amid an epic short squeeze in GameStop, which was partially fueled by Reddit-driven retail investors. At the height of the so-called meme stocks’ surge, Robinhood restricted trading of certain securities due to increased capital requirements from clearing houses. Robinhood raised more than $3.4 billion in a few days to shore up its balance sheet.

“We think payment-for-order flow is a better deal for our customers, vs. the old commission structure. It allows investors to invest smaller amounts without having to worry about the cost of commissions,” Robinhood CFO Jason Warnick said Saturday at the company’s virtual roadshow.

However, Warnick said Robinhood wants to be fully engaged in the regulatory and political discussion about PFOF. He said that if the model changed, Robinhood and the industry would be able to adapt.

Wharton’s Erickson called Robinhood “the most concerning high profile IPO since WeWork tried to go public a few years ago.” The embattled office-sharing company pulled its IPO in 2019 after investors balked at public numbers and disclosures in its prospectus.

Robinhood has given no indication that investors have lost their appetite for its IPO. But there are plenty of reasons for concern.

In June, Robinhood was slapped with FINRA’s largest-ever penalty, totaling about $70 million. The company has also faced lawsuits for its multiple days of outages during times when trading volume was heavy during the pandemic. Additionally, Tenev was forced to testify to the House Financial Services Committee in February regarding the GameStop trading mania. Tenev’s phone was seized by federal attorneys in investigations about restricted stock trading.

Robinhood governance seems to be “tone deaf” to these issues, Erickson said.

“Based on significant issues with both their internal controls and regulators, you would have thought that their board would be filled with people that have extensive securities internal control and regulatory experience to compensate for this,” said Erickson, who was formerly the head of global equity capital markets at Barclays. “Unfortunately, that isn’t even close to being the case.”

— with reporting from CNBC’s Michael Bloom and Ari Levy.

Robinhood starts trading Thursday. Here's everything investors need to know (cnbc.com)

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