Robinhood’s IPO put on hold amid GameStop controversy?

By William Girling
Trading and investing fintech app Robinhood is reportedly shelving its IPO to focus on dealing with the fallout of the GameStop incident...

Trading and investing fintech app Robinhood is reportedly shelving its IPO to focus on dealing with the fallout of the GameStop incident.

Despite managing to raise an additional US$2.4bn on top of the $1bn secured last week, Robinhood’s executive leadership apparently consider it unwise to proceed with going public until the ongoing controversy has passed. Reports that the company was considering an IPO first circulated in November last year.

Ultimately, this may turn out to be a wise decision: customers took to the anonymous professional network Blink to air their views, particularly amid claims that Robinhood had prohibited trading and sold users’ assets without permission. 

Conducting an impromptu poll on whether the company had soured its chances of a successful IPO, 83% of 8,750 professionals believed this to be the case.

Musk grills Tenev on Clubhouse

Furthermore, Tesla CEO Elon Musk made characteristically outspoken comments regarding last week’s events, pointedly asking Vladimir Tenev, CEO of Robinhood, to “spill the beans” on the exclusive audio app Clubhouse.

“Do you want to hear the real story from Vlad [from] Robinhood about what happened on the Street with GameStop?” Musk asked, followed by, “What happened last week? Why couldn’t people buy the GameStop shares? The people demand answers, and they want to know the truth.”

Musk implied that Citadel Securities, a globally leading market-maker and notable partner of Robinhood, could have been responsible for the sudden halt on trading GameStop stock.

However, Tenev, while acknowledging the rumour, countered that it was baseless in fact: “Robinhood stands for [...] democratising access to stocks,” he stated on Clubhouse. “We want to give people the access… but we had no choice in this case, we had to conform to our regulatory capital requirements.”

Tenev also stated that the resumption of trading on Monday would mark the end of the “stringent position limits” imposed on users at the end of last week. 

Clearly, the debate provoked by this story will have grand implications not just for Robinhood’s future but potentially for all of fintech. Although it has the power to democratise the instruments of investment, how this new dynamic fits in with the established hegemony of Wall Street will form the ongoing conversation. 


Featured Articles

Fintech innovation and the alternative finance space

The alternative finance space is gaining ground against traditional institutions, so we take an in-depth look at modern methods of financing

Fintech focus: How to stay resilient during the downturn

As investment opportunities shrink and startups put the brakes on expansion, we spoke to industry experts about how startups can increase resilience

How the economic climate is impacting alternative finance

The economic climate is having a huge impact on the alternative finance space. We spoke to three leading industry experts to find out more

Has the ‘gamification’ of investing apps gone too far?

Financial Services (FinServ)

Top 10 Digital Reports & Consultancies for the fintech space

Financial Services (FinServ)

Analysis: China's civil unrest & the long-term economic view

Financial Services (FinServ)