Robinhood Stock – Prepare to Invest in the IPO

Learn how to invest in Robinhood stock once the IPO arrives. Open an account with Robinhood, which is weighing the possibility of selling IPO shares to its customers (according to Bloomberg – see below).

Robinhood does not yet provide IPO access, but the company may offer IPO shares to its customers in a directed share program. Ask them for it!

Breaking 03/25/2021: Reuters reports that Robinhood is building access to IPOs for its customers as predicted here since December 2019 (more below).

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If you’re unhappy with Robinhood, try Tradestation (a next-level platform for active traders) or M1 Finance (for long-term buy and hold investors) as alternatives.

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Latest Robinhood Stock IPO News

03/30/2021: Robinhood’s Revenue Increased By 514% YoY- $682M In 2020
03/29/2021: Robinhood heads for IPO with a tarnished reputation
03/25/2021: Robinhood aims to allow users to buy into IPOs
03/23/2021: Robinhood Files for IPO Confidentially
03/07/2021: Robinhood chooses the Nasdaq for its IPO, sources say
02/26/2021: Robinhood to Plan Confidential IPO Filing as Soon as March
02/25/2021: Robinhood is still on track for a hot IPO despite the GameStop controversy
Older news…

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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 paid products to its 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 when IPO arrives, the company will offer IPO shares to its customers. See the Directed Share Program section below for the reasoning behind my prediction.

Prominent venture capital investors include Sequoia Capital, Index Ventures, Ribbit Capital, Andreessen Horowitz, and ICONIQ Capital. 

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 2021, possibly May. 

The company announced that it submitted a confidential S-1 filing to the SEC for scrutiny on March 23rd. Once approved, the S-1 filing will be released to the public. 

Robinhood has hired Goldman Sachs to lead the IPO, as reported by the NY Post, estimated to be valued at more than $20 billion. 

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 so after the S-1 is released to the public.

News regarding the Robinhood IPO will be forthcoming. Bookmark this page for the latest. 

Will there be a Robinhood IPO?

Yes, probably.

Most mature startups 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. However, recent reporting indicates that Robinhood has chosen Goldman Sachs to lead the IPO, which suggests it may happen in May 2021. 

Keep a lookout for additional reporting and the 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 Ticker?

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. 

Here are some suggestions, both of which appear to be available:

• ROBN
• HOOD

RH is occupied by Restoration Hardware. 

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.

Stock Advisor is currently half off at just $99 for an annual subscription. 

Learn More about Stock Advisor

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. 

• Participate in the Direct Share Program (Prediction)
• Buy Robinhood stock After it Begins Trading
• Buy Robinhood stock during the Initial Public Offering (IPO)
• Acquire Robinhood shares in Pre-IPO secondary marketplaces

1. 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 (December 2019): Robinhood will integrate IPO access into its platform in 2021, either directly or through a third party. Then launch the IPO trading platform with their own Robinhood IPO!

Update 03/25/2021: Both predictions coming true! Reuters reported on 03/25/2021 that Robinhood is building its own IPO platform!

Bloomberg reported in January that Robinhood is considering selling shares to customers! We’ve advocated for it, now let’s hope they follow through. 

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 — occasionally customers. 

We won’t know until they release the public Form S-1. Details often come in amended versions. 

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 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 did the same for hosts. 

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! I have no inside information on this — just a guess. 

Pay attention to the news, this page, and your email associated with your Robinhood account in case it happens. 

Ask Robinhood to give IPO access to all customers! Can’t hurt. They wouldn’t be where they are without their loyal customer base. 

2. Buy Robinhood Stock After it Begins Trading

Since acquiring pre-IPO shares is usually reserved for wealthy and connected investors, the most likely way you’ll ever own the stock is to wait patiently for the IPO to complete. 

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 better for long-term investors). 

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 the eventual Robinhood public listing. 

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?

For investors looking to participate in IPOs, TradeStation and Webull offer IPO investing to customers (more below). However, you’re never guaranteed a share allocation and most high-demand IPO will not be available. 

Robinhood is for active amateur to intermediate traders. Long-term investors may consider other platforms that are better for dividend reinvestment.  

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. 

Learn More about M1 Finance

3. Buy Robinhood Stock in the Initial Public Offering (IPO)

Ambitious investors may attempt to position themselves to invest in the Robinhood IPO once it arrives. Most retail investors will not get access.

I think this is especially true for the Robinhood IPO. I believe Robinhood will reserve all retail shares for their customers. 

However, the wealthiest clients at the top investment banks will get IPO shares in the hottest deals.

Your chances of getting IPO shares depends on four factors:

• IPO demand
• Your broker and eligibility (more likely if you have an account with Robinhood)
• Your assets under management at the broker
• Propensity to flip shares

As IPO demand increases, the chances of receiving IPO shares decreases. Therefore, the IPOs that are most interesting to the masses are the hardest to access. 

Lower-demand IPOs may be available to retail investors who are customers at participating brokers. 

What are the Best Online Brokers for IPO Investing?

For an extensive list of IPO-friendly online brokers and their eligibility, check out this page.

Robinhood does not provide IPO access. 

Wealthy customers ($1 million+ accounts) at Fidelity, TD Ameritrade, and Schwab may have a shot at some IPOs, depending on demand. 

TradeStation and Webull are the best options for investors with less than $250,000. Both give limited access to lower-demand IPOs and secondary offerings through a partnership with ClickIPO, an IPO investing app.

Joining a broker that offers access to IPOs does not guarantee a share allocation, especially in high-demand IPOs. You are probably better off waiting for the company to start trading after the IPO. 

Click here to download the free 15-page eBook, How to Invest in IPOs – A Fundamental Guide for Ordinary Investors.

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.

Check out this list of the hottest upcoming IPOs for more investment ideas.

Robinhood Stock News Archive

02/03/2021: Robinhood moves forward with first Super Bowl ad as brand crisis mounts (video below)
02/02/2021: Sen. Elizabeth Warren asks Robinhood to explain why it restricted GameStop
02/02/2021: Robinhood’s Other Drama: An IPO Firm May Need More Than Ever
02/01/2021: Robinhood raises another $2.4 billion as broker app deals with retail trading frenzy
02/01/2021: Robinhood appears to be benefitting from the trading controversy
02/01/2021: Robinhood CEO explains to Elon Musk why his platform restricted trading last week
01/29/2021: Robinhood restricts crypto trading ‘due to extraordinary market conditions’
01/29/2021: Robinhood raises $1 billion and taps credit lines to make trading of GME available
01/07/2021: Robinhood Weighs Selling Its Shares to Clients in IPO (YES! This website agrees.)
01/28/2021: Class-action lawsuit filed against Robinhood for restricting trading
01/28/2021: Robinhood will allow limited buying of restricted securities Friday, GameStop jumps
01/28/2021: Robinhood, Interactive Brokers restrict trading in GameStop stock and options
12/17/2020: SEC charges Robinhood with misleading customers about how it makes money
12/16/2020: Massachusetts regulators file complaint against Robinhood, alleging manipulation
12/08/2020: NY Post Reports: Trading app Robinhood hires Goldman Sachs to lead IPO 
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
07/22/2019: Robinhood Raises $323M to Democratize Finance For All
04/11/2019: Ahead of IPO buzz, Robinhood introduces new premium trading features

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.