Photo by: STRF/STAR MAX/IPx 2021 2/26/21 Robinhood plans to file for an initial public offering ... [+] (IPO) as early as March. STAR MAX Photo: Robinhood logo photographed off an iphone SE 2020.STRF/STAR MAX/IPx
Investing platform Robinhood expects to net $2 billion in proceeds from its initial public offering, according to an updated Securities and Exchange Commission filing published on Monday, July 19. With an initial offering price ranging between $38 and $42 per share, the eight year-old fintech giant is expected to reach up to a $32 billion valuation.
This haul is expected despite a downturn in crypto markets that has seen the value of leading assets such as bitcoin and ethereum lose between 46.14% and 19.68% of their value respectively over the last 3 months. Perhaps even more consequential for Robinhood is the drop in dogecoin, which has fallen from an all-time high of $0.76 to $0.17.
Bitcoin and ether have fallen in recent monthsTradingView
According to the filing, Robinhood’s crypto transactions made up 17% of the company’s total revenue for the three months ended on March 31, 2021, with 34% driven by dogecoin trading. The firm has $11.5 billion worth of crypto assets under custody, comprising just over 14% of its $80.9 billion total assets under custody. As expected given the market downturn is a warning that crypto-driven revenue could further dwindle as retail interest in cryptocurrencies fall and assets such as bitcoin remain stuck in narrow price ranges.
Bitcoin's price range has narrowed in recent monthsTradingView
"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."
As Robinhood prepares to go public at a yet unspecified date, investors will pay particular attention to other crypto-affiliated stocks that can serve as a bellwether for investor interest, such as Coinbase (COIN). The crypto giant went public on April 14th via the largest direct listing in history, achieving an $86 billion valuation. However, the stock currently priced at $221 is more than 50% off of its all-time high of $429 despite record revenues and profits.
Follow me on Twitter or LinkedIn. Check out my website.