SAN FRANCISCO — Robinhood is understood for its affiliation with “meme stocks.” Now the inventory buying and selling app might develop into one.
On Wednesday, Robinhood priced its preliminary public providing at $38 a share, the company said, valuing it at $31.7 billion. It raised $1.89 billion from the providing, setting the stage for the corporate to begin buying and selling on Thursday underneath the image HOOD.
The value was at the low finish of Robinhood’s initially disclosed range of $38 to $42, in a signal of doable investor hesitance. Robinhood’s bankers have said they count on the early buying and selling of the inventory to be extra risky than these of different I.P.O.s.
Robinhood’s providing is being intently watched, even amid probably the most frenzied yr for listings because the dot-com bubble of 2000. The firm’s position in facilitating inventory trades, its mission to upend Wall Street and its string of current controversies have made it a image of Silicon Valley disruption and the challenges that include it. It has additionally been intently recognized with driving the roller-coaster buying and selling of “meme stocks” like GameStop and AMC Entertainment this yr.
Robinhood, which has stated it desires to democratize finance, additionally sold a large chunk of its offering directly to its customers by way of its app. That will take a look at whether or not its prospects will maintain the inventory or shortly dump it. Robinhood had angered prospects when it halted certain trades in January, prompting some to plot to flip or guess towards the corporate’s inventory when it listed its shares.
The firm has additionally confronted a number of lawsuits and regulatory inquiries over its enterprise. On Tuesday, it stated in a submitting that the Financial Industry Regulatory Authority was investigating its founders’ compliance with registration necessities.
That follows a $70 million superb that Robinhood paid to FINRA in July for deceptive prospects and harming them in outages. Last yr, the corporate additionally paid $65 million to the Securities and Exchange Commission for deceptive prospects.
Over the weekend, Robinhood’s founders, Vlad Tenev and Baiju Bhatt, hosted a public model of its investor presentation for patrons, taking questions on laws and its enterprise mannequin. Mr. Tenev marveled at Robinhood’s speedy progress, whereas noting it had additionally “led to some real challenges.”