SAN FRANCISCO — Robinhood is understood for its affiliation with “meme shares.” Now the inventory buying and selling app may develop into one.
On Wednesday, Robinhood priced its preliminary public providing at $38 a share, the corporate mentioned, valuing it at $31.7 billion. It raised $1.89 billion from the providing, setting the stage for the corporate to start out buying and selling on Thursday beneath the image HOOD.
The value was on the low finish of Robinhood’s initially disclosed vary of $38 to $42, in an indication of potential investor hesitance. Robinhood’s bankers have mentioned they count on the early buying and selling of the inventory to be extra unstable than these of different I.P.O.s.
Robinhood’s providing is being carefully watched, even amid probably the most frenzied 12 months for listings for the reason that dot-com bubble of 2000. The corporate’s position in facilitating inventory trades, its mission to upend Wall Avenue and its string of current controversies have made it an emblem of Silicon Valley disruption and the challenges that include it. It has additionally been carefully recognized with driving the roller-coaster buying and selling of “meme shares” like GameStop and AMC Leisure this 12 months.
Robinhood, which has mentioned it needs to democratize finance, additionally offered a big chunk of its providing on to its customers through its app. That may take a look at whether or not its clients will maintain the inventory or shortly dump it. Robinhood had angered clients when it halted sure trades in January, prompting some to plot to flip or guess in opposition to the corporate’s inventory when it listed its shares.
The corporate has additionally confronted a number of lawsuits and regulatory inquiries over its enterprise. On Tuesday, it mentioned in a submitting that the Monetary Trade Regulatory Authority was investigating its founders’ compliance with registration necessities.
That follows a $70 million high-quality that Robinhood paid to FINRA in July for deceptive clients and harming them in outages. Final 12 months, the corporate additionally paid $65 million to the Securities and Change Fee for deceptive clients.
Over the weekend, Robinhood’s founders, Vlad Tenev and Baiju Bhatt, hosted a public model of its investor presentation for purchasers, taking questions on laws and its enterprise mannequin. Mr. Tenev marveled at Robinhood’s fast development, whereas noting it had additionally “led to some actual challenges.”