With only a few days left until Robinhood Markets is listed, investors who want to participate in one of the largest IPOs of the year have only one option to secure part of the coveted share.
Robinhood, the trading app set to trade on Thursday, was one of the most sought after stocks on sites like EquityZen and Forge in 2020. These companies provide a secondary market where investors and employees of highly valued private companies can sell their shares. These websites are primarily limited to accredited investors, usually defined as those with a net worth of $ 1 million who can buy shares in private companies. Currently, accredited investors can buy shares in Kraken, a smaller rival of Coinbase, banking startup Chime, and Impossible Foods on Forge, while EquityZen has ByteDance, TikTok’s parent company, Elon Musk’s the Boring Co., and automotive tech company Rivian. Many of these companies are expected to go public soon.
Now Robinhood is no longer available on EquityZen or Forge, executives said. Investors looking to buy stocks must reach out to the company itself.
Robinhood made this relatively easy with its IPO access function. Launched in May, IPO Access allows Robinhood customers to buy shares of some companies before they go public. So far, Robinhood has access to stocks in. granted
(Ticker: FIG), which sells fashionable medical scrubs;
F45 training companies
(FXLV), the fitness franchisor;
(YOU), the airport security company; and
(OB), the web advertising company.
“We are very excited to see what Robinhood is doing,” said Kelly Rodriques, Forge CEO. “We have a similar belief that more people should be able to participate in phenomenal companies.”
Prior to Robinhood’s initial public offering, retail investors were typically banned from highly anticipated IPOs like Airbnb (ABNB) or DoorDash (DASH) until companies actually started trading. Up until now, shares in these companies were generally only allocated to institutional investors or wealthy individuals before they began trading.
Rodriques pointed out another groundbreaking aspect of Robinhood’s initial public offering. The company has relaxed the lock-up period for its employees and directors, who can now sell 15% of their inventory on the first day of trading. Three months or 91 days later, they can sell another 15%, the prospectus says. Typically, employees and insiders are prevented from selling their shares for 90 to 180 days after an IPO. “Not only do you have different people going into the business, you also have investors and employees going out.” [them]”Said Rodriques.
Robinhood is disrupting asset allocation with its IPO, Rodriques said. Investors, both in the US and around the world, must save for their retirement, he said. “People should have access to participate in our innovative economy. It is a fundamental opportunity to participate in the world’s highest asset classes. It’s good for society to have more people involved, ”he said.
Here’s a quick tutorial on how to get Robinhood Stock:
Go to IPO Access, which currently has three companies – Riskified, Robinhood, and Duolingo – available for purchase. Choose Robinhood.
At the top right of the screen is a field that says “Request to buy HOOD”. Click on “I’m interested”.
A “Confirm your authorization” window will appear. Here, Robinhood informs you that Finra is preventing some people from receiving shares, it also makes you aware of Robinhood’s flipping policy, and that you understand the risks of investing in an IPO. Select “I agree”.
In the field labeled “Request to buy HOOD”, enter the number of shares you want and their price range.
A How Assignment Works window appears, letting you know that even if you request shares, you may not get this. Click on the “Start request” tab to continue.
Next, confirm the number of stocks you want and their price range. Keep in mind that this is a conditional offer to buy and will not become an active order until Robinhood reviews its IPO on Wednesday night.
As soon as you have confirmed your order, you will receive an email informing you that your request has been received.
But that’s not the end. Once Robinhood evaluates its initial public offering, which is expected Wednesday night, the company will return to customers asking them to confirm their interest in buying stocks. Customers are asked to adjust the number of shares they want and the price to be paid.
Customers will not know if they will receive any shares until Robinhood lists its shares.
On Thursday before Robinhood starts trading, customers will know if and how many shares they were able to buy, said a person familiar with the situation. This has led to complaints from other IPOs. Some Robinhood clients went through the process for FIG only to find on the listing day that they had not received any shares. That was because only a small fraction of FIG stocks, only 1%, were made available to Robinhood customers, the person said.
Robinhood itself provides up to 35% of the 55 million shares, according to the prospectus.
Write to Luisa Beltran at [email protected]