Robinhood sets IPO price at lower end targeting $2 billion raise

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Stock and crypto brokerage trading app Robinhood has set its initial public offering price at $38, valuing itself at around $32 billion.

Announcing the pricing on July 28, Robinhood said the net proceeds from the public offering will be about $1.89 billion.

It previously set the pricing range between $38 and $42. The trading of the shares is expected to start on July 29 on the Nasdaq stock exchange.

About five percent of the 55 million shares of its Class A common stocks to be issued will be offered by Robinhool's existing shareholders. 

"Robinhood intends to use the net proceeds for working capital, capital expenditures, funding its anticipated tax obligations related to the settlement of RSUs, and general corporate purposes including increasing its hiring efforts to expand its employee base, expanding its customer support operations and satisfying its general capital needs," the firm said in the announcement. 

Robinhood filed the public offering prospectus on July 1, noting at the time that 17% of its total revenue in Q1 came from crypto trading transaction fees, which represented a big jump from the 4% in Q4 2020. 

"While we currently support a portfolio of seven cryptocurrencies for trading, for the three months ended March 31, 2021, 34% of our cryptocurrency transaction-based revenue was attributable to transactions in Dogecoin, as compared to 4% for the three months ended December 31, 2020," the firm said in the initial filing.

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