Robinhood Could Offer 35% Of IPO Shares To Its Own Customers: WSJ

One of the most highly anticipated IPOs of the second half of 2021 will likely be Robinhood, a popular trading app.

What Happened: Robinhood has said since March it would allocate a portion of its IPO shares to its customers as it pushes into the IPO allocation market.

The company could offer as much as 35% of its IPO shares to its customers, according to a Wall Street Journal report.

Companies often allocate 10% of shares to individual investors according to sources.

Robinhood has begun offering allocations of certain IPOs to customers. The company offered shares of Clear Secure Inc YOU and Figs Inc FIGS to its customers. Robinhood also announced that Duolingo IPO shares will be offered to its customers.

See Also: How To Buy Robinhood IPO Stock 

Why It’s Important: Allocating a large portion of its share to customers could be an incentive to get new customers to sign up for Robinhood prior to the IPO.

Robinhood has more than 18 million funded accounts and saw customer accounts rise in 2020 and early 2021 with the boost of new retail traders entering the market, but it faces competition from other commission-free brokerages.

Competitors like SoFi Technologies Inc SOFI and Public.com have offered IPO allocations to their customers.

Four new biotech SPACs from Chamath Palihapitiya offered 5% of shares exclusively to customers on SoFi.

The IPO market has been hot in 2021 with more than $190 billion raised from offerings in the first six months, exceeding the record set in 2020.

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