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Robinhood's unorthodox IPO roadshow: How to watch and what to expect

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The online brokerage Robinhood, which aims to "democratize finance for all" through commission-free trading, is having a highly non-traditional IPO roadshow this Saturday, July 24. 

Rather than pitching itself to investors in closed-door meetings, Robinhood will livestream its IPO roadshow on this website from 3-4 p.m. ET/12-1 p.m. PT. — anyone can watch, and the public was allowed to submit questions until midday on Friday, July 23.

The company, which faces litigation and regulatory scrutiny over its decision earlier this year to restrict trading in so-called meme stocks, aims to trade on the Nasdaq July 29 under the ticker “HOOD." It plans to set share prices in a range of $38 to $42, equating to a potential valuation of around $35 billion.

The presentation will be split into two main segments — one in which Robinhood leadership will detail the company’s business model (3:05 p.m. ET/12:05 p.m. PT) and a Q&A portion with CEO and founder Vlad Tenev along with Chief Financial Officer Jason Warnick (3:40 p.m. ET/12:40 p.m. PT).

Other speakers who will present at the roadshow include founder Baiju Bhatt, Chief Legal Officer Dan Gallagher, Chief Operating Officer Gretchen Howard, Chief Marketing and Communications Officer Christina Smedley, Chief Product Officer Aparna Chennapragada, Head of Investor Relations and Capital Markets Irvin Sha, and Vice President of External Affairs and Community Mary Elizabeth Taylor.

Vlad Tenev, CEO of Robinhood Markets, is seen testifying about GameStop trading in a frame grab from video during an entirely virtual hearing of the U.S. House of Representatives Committee on Financial Services entitled “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide?”, in Washington, U.S., February 18, 2021.   House Committee on Financial Services/Handout via Reuters
Vlad Tenev, CEO of Robinhood Markets, is seen testifying about GameStop trading in Washington, U.S., February 18, 2021. House Committee on Financial Services/Handout via Reuters

The roadshow’s Q&A segment will allow everyday retail investors to interface with Robinhood executives, should their question be selected, though the company cautioned that it might not be able to answer every question.

“Like all companies going through the IPO process, we’re limited by regulations in what we can say about our own IPO,” Robinhood’s website states.

Though virtual IPO roadshows are not entirely out of the norm in light of the pandemic, Robinhood’s decision to publicly livestream its roadshow on its website presents a unique opportunity for retail investors to attend an event that would typically be reserved for large institutional investors.

“The IPO roadshow we’re hosting is a chance for everyday retail investors to join for a presentation from Robinhood leadership that would usually only be offered to institutional investors in the leadup to going public,” Robinhood’s website states.

Robinhood has gained prominence amid the rise of retail investing during the pandemic, and it has also attracted the attention of lawyers and regulators. Just last month, the Financial Industry Regulatory Authority fined Robinhood a record $70 million over several outages the company experienced last year.

The company's CEO was called to Congress earlier this year after Robinhood halted buying in meme companies including GameStop (GME). The incident drew attention to the controversial way that Robinhood makes money — payment for order flow (PFOF). Through PFOF, brokerages like Robinhood receive payments for routing trades to particular market makers, which critics say creates a conflict of interest.

The heightened scrutiny over PFOF should be a red flag for investors, David Trainer, CEO of the investment firm New Constructs, said in a recent note.

"If regulators were ever to outlaw payment for order flow, Robinhood’s revenue would be severely affected, creating an alarming risk for investors," Trainer wrote.

Thomas Hum is a writer at Yahoo Finance. Follow him on Twitter: @thomashumTV

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