In its IPO (initial public offering) filings last month, Robinhood Markets Inc. said that it now decided to go out starting June publicly. However, the plans for the financial company would be hampered by postponements for the US Securities and Exchange Commission (SEC) reviews.
According to people who are knowledgeable about the event, the regulators would be evaluating the booming cryptocurrency business of the firm.
It is expected that the listing will be pushed through July instead of its original June schedule. Previously, Robinhood finished the filing of the public offering in March.
Robinhood's Cryptocurrency Business to Be Reviewed
Before the Robinhood's IPO becomes public, the SEC should first review the company's crypto business. Why?
According to Gizmodo's report on Thursday, June 24, it was in 2018 when Robinhood first engaged in the cryptocurrency operations. Presently, the company allows the traders to use digital currencies like the popular meme coin Dogecoin and Ethereum and Bitcoin.
In the platform, many newbie investors usually test it when exploring cryptocurrencies in the volatile market. This year, the investors experienced various trends that happened in virtual currencies.
During mid-April, the bitcoin price surged to over $64,000. Bitcoin purists believed that posts coming from Elon Musk dictate the value of the world's largest cryptocurrency. It recorded a massive spike of 458%, a double increase in the part of Robinhood's market cap in the past three months.
Going back to its IPO, the SEC officials will be reviewing its cryptocurrency business. It would take at least 30 days to finish the process and the additional two weeks for the possible amendments.
This month, Robinhood has assigned the new batch of board members, Bloomberg wrote in a report.
Robinhood Sets Limitation to IPO Shares Flippers
In another report by Reuters, Robinhood informed the users to never sell their shares within the first 30 days of IPO.
The online brokerage said that those who would "flip" their IPO shares would be restricted from engaging in future undertakings. The punishment would persist for two months.
"We won't prevent you from selling shares you get through the IPO Access program. However, if you sell IPO shares within 30 days of the IPO, it's considered "flipping," and you'll be restricted from participating in IPOs for 60 days," the company noted on its website.
SoFi Will Collect Money From Flippers
Another company, Social Finance (SoFi), has stated that it would fine the "flippers" who abuse the selling of shares during the initial launch. The consultancy organization unveiled its IPO to the public recently.
All users could use Robinhood's IPO platform without limitation in the account number. The first company that accessed Robinhood's IPO Platform was the medical scrub firm FIGS Inc. last May.
The firm added that as much as possible, the IPO stock flipping should be avoided. When the flipping of shares continues, there will be fewer IPOS in the next years to come.
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Written by Joseph Henry
