Robinhood Files With SEC; Will Trade On Nasdaq

Robinhood, a free brokerage app, will be going public, Axios reported. The company has filed confidentially with the U.S. Securities and Exchange Commission (SEC).

It’s not clear how the company plans to do go public, however, as it is unknown whether it plans to go for a traditional initial public offering (IPO) or a direct listing, according to Axios.

The news comes as Robinhood has been under fire for restricting some stock trades as a horde of retail investors rallied for “meme stocks” like GameStop and AMC, throwing the market into disarray.

Later on, the company said the shutdowns on some stocks were driven by collateral requirements from its clearinghouse, although that explanation only came days after the initial controversy, Axios reported. The issue later led CEO Vlad Tenev to be questioned on Capitol Hill.

In the middle of all the trouble, Robinhood raised billions of dollars so it wouldn’t hit other such liquidity issues in the future, Axios reported.

Robinhood announced its intention to go public on the Nasdaq earlier this month, after getting a boost from people stuck at home during the pandemic, PYMNTS reported.

According to estimates, the Robinhood app was downloaded 1.4 million times just over three days in January, although the downloading of the app doesn’t necessarily mean that the app was opened, Axios reported.

Despite the app’s success, critics and negative voices are starting to crop up, PYMNTS reported separately.

Part of the pressure comes from the controversy over commission-free trading, particularly with “payment for order flow.” Brokers tend to reward platforms like Robinhood for steering orders to the broker, but EU financial services senior official Ugo Bassi has said that type of trading would be illegal in the region, which led to more volatility for stocks like GameStop.

Companies are currently gunning to steal some of Robinhood’s trading shares, with others offering commission-free trading and looking to improve on aspects like payment for order flow.