(PresidentialWire.com)- Well, well, well. It seems like despite all the trouble Robinhood found itself in earlier this year, the extensive damage control they did may pay off BIG time for them.
The popular app-based stock-trading platform is looking at a potential $40 billion initial public offering by the end of the summer, according to reports. The upstart platform that gained incredible popularity during the lockdown of last year is hoping to rapidly capitalize on its success, despite the significant controversies it’s generated.
Robinhood rose to cultural prominence with amateur day traders in 2020 when millions of potential users were stuck at home with time on their hands. That led to increasing concerns over the ‘gamifying’ of trading, with a platform that offered no commission trades and available leverage.
But before Robinhood gets its IPO, the Securities and Exchange Commission has a few questions. SEC Chairman Gary Gensler has already let on to the kinds of things that come to mind, saying in a statement, “Some academic studies suggest more active trading or even day trading results in lower returns for the average trader.”
Gensler also questioned Robinhood’s “no commission” model and whether “broker-dealers have inherent conflicts of interest…to encourage customers to trade more frequently than is in theose customers’ best interest.”
A source with knowledge of the company said that Robinhood would allay these concerns to the SEC’s satisfaction and that the IPO would go on without delay.
Robinhood was already forced to push back its IPO once, originally slated for March of this year. But January’s “meme-stock” controversy threw a wrench into those plans. Amid an unprecedented buying spree on GameStop stock and a few others in January, beginning with followers of the popular subreddit WallStreetBets, Robinhood prohibited users from buying particular stocks due to clearing problems. That caused a furor among users, eliciting condemnations from prominent figures ranging from Barstool Sports’ Dave Portnoy and Donald Trump, Jr. to Congresswoman Alexandria Ocasio-Cortez.
None of that seems to matter though, as Robinhood’s IPO seems more likely by the day. And the biggest reason is clear: Robinhood is simply making money hand over fist.