Learn how to invest in Robinhood stock once the initial public offering (IPO) arrives. Open an account with Robinhood or another commission-free online broker. Investors looking for broader access to IPOs today can look at TradeStation or Webull, which both offer IPO access for as little as $100.
See the “Directed Share Program” section below for my prediction on why I think Robinhood will reward customers with IPO access to the Robinhood IPO in 2020 or 2021.
Robinhood does not yet provide IPO access.
Latest Robinhood Stock IPO News
09/03/2020: Robinhood is reportedly under SEC investigation, could pay $10 million fine
08/17/2020: Robinhood Now Valued at $11.2 Billion With New Fund Backing
07/21/2020: Robinhood scraps launch of its investing app in the UK
Robinhood IPO, a Top Unicorn, Expected to IPO in 2020
Robinhood Raises $323M to Democratize Finance For All
Ahead of IPO buzz, Robinhood introduces new premium trading features
What is Robinhood?
Robinhood is a Silicon Valley startup that revolutionized online investing by offering a commission-free trading platform. Popular with younger investors, you can place unlimited stock, bond, or crypto-currency trades on the Robinhood app and pay no fees.
The disruptive business model attracted a few copycat brokers, namely M1 Finance and Webull, then caused Charles Schwab to eliminate stock trading fees. Schwab’s move cascaded to the entire industry.
Now that most online brokers are commission-free, Robinhood will likely offer other products to its broad customer base en route to becoming a profitable company.
Is Robinhood Stock Publicly Traded?
No, the company is privately owned. The shareholders include founders, early investors (venture capital firms), and employees.
You can find a current list of Robinhood investors at Crunchbase.
Since Robinhood is an online stock brokerage itself, I predict that when it’s time for the IPO, the company will offer IPO shares to its customers. See the Directed Share Program section below for the reasoning behind my prediction.
The company will need to build IPO investing into its existing platform first, which can be accomplished with a partnership with ClickIPO, similar to what Webull and TradeStation have already implemented.
If you don’t yet have an account with Robinhood, sign up as soon as possible to increase your chances of getting access to the Robinhood IPO.
When is the Robinhood IPO Date?
The Robinhood IPO date is currently unknown. There is speculation that the Robinhood IPO date will be sometime during 2020.
But we won’t know until one of two things happens:
- The Robinhood IPO date range leaks to the financial press
- The SEC releases a publicly-available Robinhood S-1 filing
Even when the company and SEC publicly release the S-1 filing, we still won’t know a firm date. However, the IPO date typically occurs a month or two after the S-1 releases to the public.
Because Robinhood is a so-called unicorn and Silicon Valley darling, you can be sure that the Robinhood IPO date announcement will be loudly publicized.
Will there be a Robinhood IPO?
Yes, probably.
Most mature start-ups like Robinhood do eventually pursue an IPO. Original investors, including founders, venture capitalists, and employees, want to cash out when the valuation peaks. IPOs are often the peak valuation.
Some early investors will hold on to stocks for the long-term as well. But many will cash out at least some of their shares in the Robinhood IPO.
The timing of a Robinhood IPO is uncertain. Since 2020 has been so volatile, and the Robinhood app experienced some downtime due to technical glitches, we may not see a Robinhood IPO until 2021.
Keep a lookout for an S-1 filing at the Security and Exchange Commission (SEC). Once the S-1 filing becomes public, we should have a better idea of when the Robinhood IPO will occur.
What is the Robinhood Stock Price?
Since Robinhood is not publicly traded on a stock exchange, there is no Robinhood stock price yet.
What is the Robinhood Stock Symbol?
Robinhood has not yet submitted public filings to the Securities and Exchange Commission. Therefore, it is not yet known what the Robinhood stock symbol will be. We can only speculate.
Will Robinhood Stock be a Motley Fool Stock Advisor Recommendation?
We won’t know until after the IPO if Robinhood will be a Motley Fool Stock Advisor recommendation. However, Robinhood stock fits the mold of high-growth, disruptive business models that the Fool typically recommends.
When the Motley Fool recommends a company, there is usually an immediate spike in the price. Fool newsletter subscribers are notoriously long-term minded and rarely sell, meaning the stock price will continue to rise.
Robinhood may also receive a recommendation by the Motley Fool Rule Breakers newsletter or other premium services. Both services have handily beaten the broader market since the early 2000s.
Read this Motley Fool Stock Advisor review to learn about the stock selection methodology and about how you can participate in excellent returns.
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Can I Buy Robinhood Stock? Four Potential Ways
It is challenging to acquire shares of a stock that is not yet trading on the public markets. It is possible, but you may not be eligible, and it may not be worth the hassle.
For example, if you look at Uber stock, individual investors salivated for years, waiting for it to trade publicly. When it finally went public, the stock price fell. So you were better off waiting to buy the stock instead of buying it before the IPO.
There are four potential ways you may be able to acquire shares of Robinhood in the future.
- Buy Robinhood Stock in the Initial Public Offering (IPO)
- Participate in the Direct Share Program (Prediction)
- Buy Robinhood Stock After it Begins Trading
- Acquire Robinhood Shares in Pre-IPO Secondary Marketplaces
1. Buy Robinhood Stock in the Initial Public Offering (IPO)
Ambitious investors can position themselves to invest in the Robinhood IPO. In the past, IPO investing has been challenging for regular investors to gain access. However, the marketplace is changing.
IPOs have always been available to the wealthiest customers of the leading brokerage firms. That’s great if you’re wealthy. Certain online brokers are better for IPO investing than others.
Wealthy investors may still get first access through the top tier underwriters.
Financial technology is changing the way ordinary investors can invest in IPO. I don’t think other brokers will get access to the Robinhood IPO, but you can get access to many other IPOs with a select few online brokers.
The top broker for accessing IPOs today is TradeStation.
TradeStation has partnered with the IPO investing app ClickIPO to give its customers seamless access for IPOs and follow-on offerings.
ClickIPO is a smartphone app that is available now from the Apple store. The company empowers ordinary investors to invest in IPOs and secondary offerings through their existing brokerage account.
This promising new app is available to all U.S. based investors today for research and reserving IPO shares. Link your existing online brokerage at TradeStation to get started immediately.
TradeStation is meant for more serious traders.
A second online broker called Webull has partnered with ClickIPO to bring direct IPO access through its investing app. Webull is a smartphone-first broker similar to Robinhood.
***EXTENDED – Special Offer***
If you join Webull and deposit $100 within 24 hours of opening an account, you’ll earn two free stocks valued up to $1,400. Learn more here.
But unlike Robinhood, Webull offers free access to IPOs.
You can start buying IPOs once you deposit your first $100 to Webull.
For a complete list of IPO-friendly online brokers and their eligibility, check out this page.
Click here to download the free 15-page eBook, How to Invest in IPOs – A Fundamental Guide for Ordinary Investors.
2. Participate in the Robinhood Direct Share Program (Prediction)
Will Robinhood customers receive access to the Robinhood IPO?
Robinhood is a unique case because its success is a result of its loyal customers, and they have an existing online stock brokerage platform.
My prediction: Robinhood will integrate IPO access into its platform in 2020 or 2021, perhaps in partnership with ClickIPO. Then launch the IPO trading platform with their own Robinhood IPO!
If the company chooses to provide IPO access to its customers, it will do so with a directed share program. The directed share program is a formality in the SEC filing.
Sometimes when companies file their S-1 SEC filing (to begin the IPO process), they include a directed share program for executives, affiliates, and other people who helped the company grow.
We won’t know definitively until they file their Form S-1 with the SEC (or it might come in an amended S-1 filing).
I expect the longest-standing customers, or customers with the most assets, will have the opportunity to buy more shares than new or smaller customers.
I also expect this to remain tight-lipped, so there isn’t a rush of customers just to get into the IPO.
We’ve seen this happen before. In particular, Uber offered shares to drivers that completed a certain number of trips. Square offered IPO shares to its users. Airbnb may do the same for its hosts; however, media anticipates a direct listing IPO.
Since Robinhood is an online broker that may eventually offer IPO access anyways, I believe there’s a good chance of a Robinhood directed share program for customers.
You heard it here first!
Pay attention to the news, this page, and your email associated with your Robinhood account in case it happens.
3. Buy Robinhood Stock After it Begins Trading
Since acquiring pre-IPO shares is delicate and usually reserved for wealthy (accredited) and nimble investors, the most likely way you’ll ever own the stock is to wait patiently for the IPO to complete.
In many cases, investors can get in at a price at or below the IPO price. This is not always true. The Beyond Meat IPO, for example, soared and never looked back. But Uber, which many predicted to rise steeply, actually fell on the IPO date.
The moral here is that spending significant effort to own a company before the IPO may not be worth it in the end. You may also spend time and effort to obtain shares, but only receive a small allocation. Even if the stock soars, your upside gain may be limited.
Your best chance to own the stock is by waiting for the IPO and making a purchase of Robinhood stock through a no-fee online brokerage account like Robinhood or M1 Finance, which I like better than Robinhood.
You can open the account well before the IPO, then place your first trade to learn how to buy shares of a company.
I recommend starting with a company you know well. If you like Starbucks, for example, buy Starbucks stock.
Once you open an account, make a deposit, and make your first purchase, you’ll be ready for Robinhood stock to go public.
A market order is the easiest method to place your first trade. You’ll buy Robinhood stock at the most current price. Just enter the Robinhood stock symbol (not declared yet). Then determine how much money you want to spend buying the stock, then divide that amount by the current stock price. That will tell you how many shares to put in your order.
If you prefer, you can select a price and choose a limit order to buy the stock when the stock price hits the limit price. Once the order executes, you’ll see the shares in your account, and your funds will decrease by the number of shares times the stock price, minus a small trading fee.
So what is the best online brokerage for buying Robinhood stock once it becomes public?
Robinhood, of course!
But it’s not my favorite online broker overall.
As an individual investor, you’ll want to open an account with a commission-free broker. That way, you’ll invest most of your money instead of waste it on fees.
I’ll go over one of my favorites below. It’s also commission-free and will make it easy to buy Robinhood stock after the IPO.
What is the Best Online Broker to Buy Robinhood Stock, other than Robinhood?
Robinhood is for amateur active traders. Long-term investors should consider other platforms.
I’m a big fan of the online brokerage M1 Finance. M1 Finance is a reliable and robust, no-fee online broker for beginner to advanced investors. It’s easy to get started. As your investing skills and portfolio mature, M1 is one of the best platforms to scale.
Investing in stocks is 100% free on the platform. They also offer an integrated checking account and low borrowing rates. Read my complete M1 Finance review here.
The platform is more intuitive than old school brokers because it’s built on a modern technology platform. You create portfolio “pies” that contains all the stocks and ETFs you want to own and in what percentages. Simply add Robinhood stock to your portfolio pie.
4. Acquire Robinhood Shares in Pre-IPO Secondary Marketplaces
Founders, early employees, and investors often find themselves in a difficult predicament. They own valuable shares of a company that doesn’t trade publicly.
These shareholders might have multi-million dollar net worth’s because of their stock holdings, but the stock is not liquid because it doesn’t trade on an exchange.
Two platforms have evolved to gives these individuals a way to liquidate their holding before the IPO. The two sites are EquityZen and Sharespost.
Both sites bring liquidity to an otherwise illiquid asset. Accredited investors may join these sites and attempt to buy shares of these companies when they become available.
The shares are only offered to accredited investors because the company’s financials are not publicly filed with regulators yet, increasing the risk to investors.
For high-profile companies, demand is high, lowering your chances of acquiring shares, if you’re accredited.
Conclusion
For ordinary investors, it will be challenging to acquire pre-IPO Robinhood shares. If you’re determined, follow the pre-IPO marketplaces and pay attention to any offerings. You must be an accredited investor to acquire shares this way.
Otherwise, you’ll need to wait for the IPO date to buy shares.
But that’s not necessarily a reason to be disappointed. Google’s shares rose 18% on the day of its IPO. Many people probably sold that day. Had they held for the next decade, their holdings would have been up 1,000%.
When the Robinhood IPO is near, please perform due diligence on the SEC S-1 filing and don’t buy Robinhood stock with money you can’t afford to lose.
Disclosure: This web page contains affiliate links from our partners. If a reader opens an account or buys a service from a link in this article, we may be compensated at no additional cost to the reader. Opening an account with a broker that provides access to IPOs does not guarantee the customer allocations of specific IPOs.