Online brokerage Robinhood Markets (HOOD) has received regulatory approval to begin underwriting initial public offerings (IPOs).
Robinhood CEO Vlad Tenev has announced that Robinhood Securities, a broker-dealer and clearing unit, has been “approved” to serve as an underwriter on future IPOs.
The U.S. Securities and Exchange Commission (SEC) oversees the IPO process in the U.S.
Underwriters help guide private companies through the IPO process and act as middlemen between the company and potential investors when it comes to selling their shares.
Taking companies public is a lucrative and competitive business on Wall Street. It is dominated by leading investment banks such as Goldman Sachs (GS) and Morgan Stanley (MS).
This year is poised to be a massive one for IPOs, with SpaceX set to go public on June 12. Artificial intelligence (A.I.) startups OpenAI and Anthropic are also preparing to hold IPOs.
Some companies going public are choosing to allocate more shares to retail investors.
Robinhood has been a beneficiary of that trend and is one of a handful of brokerage firms that is offering SpaceX IPO shares to its customers.
Currently, Robinhood has more than 27 million funded customer accounts and $377 billion U.S. in total assets.
The company recently entered Canada following its acquisition of cryptocurrency firm WonderFi in a $250 million all-cash deal.
HOOD stock has declined 27% this year to trade at $83.77 U.S. per share.
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