Robinhood has submitted paperwork to regulators for a public offering, the company said Tuesday, drafting what is expected to be one of this year’s largest and most controversial listings on U.S. markets.
The stock trading app has confidentially submitted the applications for an initial public offering to the Securities and Exchange Commission, according to the statement. Confidential submissions enable firms to submit material for review by the SEC before submitting a public prospectus.
The listing of the company can already take place in the next few months. Robinhood chose Nasdaq for its listing, saying a person had informed about the matter.
Robinhood’s zero-commission model and user-friendly interface make it a favorite among retailers who have been piling on the stock market while at home during the pandemic.
The company sparked controversy with its decision in January to restrict trading in ‘meme shares’ such as GameStop. The action came after shares in the companies rose in price, causing a brief push that cost hedge funds billions of dollars.
Robinhood CEO Vlad Tenev has been summoned to Capitol Hill and grilled by U.S. lawmakers, who have expressed concern that the company is encouraging the ‘gamification’ of U.S. stock trading.
Robinhood also filed regulations in February requiring the SEC, several state government agencies and the Financial Industry Regulatory Authority to investigate the company over the options trading process, as well as several interruptions in March 2020.
In the submission, Robinhood said he was in talks with Finra, the self-regulating arm of Wall Street, about a possible solution to the investigation, and that he expected to pay a fine as part of any settlement.
Robinhood raised $ 3.4 billion in convertible debt from its existing investors after the rise in trading in GameStop and other popular stocks hurt its finances.
Investors in most of the debt could convert their notes into equity at a 30 percent discount on any listing price, or a tacit valuation of $ 30 billion, whichever is lower.