Robinhood to Offer Retail Investors Access to IPO Shares

[ExFlyBoy5]

Interesting development. I wonder what the SEC will have to say about this? You know the institutional investors will NOT be thrilled...

Today, we’re starting to roll out IPO Access, a new product that will give you the opportunity to buy shares of companies at their IPO price, before trading on public exchanges. With IPO Access, you can now participate in upcoming IPOs with no account minimums.

https://blog.robinhood.com/news/2021/5/20/ipo-access-is-here

I find this somewhat ironic:

It is unclear if Robinhood clients will be able to invest in Robinhood’s pending IPO. The stock trading app is expected to go public in the first half of 2021 and has filed confidentially with the SEC.

https://www.cnbc.com/2021/05/20/rob...ares-a-longstanding-wall-street-dominion.html

 

[RunningBum]

I've never gotten in on an IPO, but I think it's common for investors to have access to them. You just have to be a big enough investor for the brokerage to let you in on some of the shares they get. That's my understanding of it, which may not be fully correct.

From the link you posted:

Here’s how it works!
1. Discover upcoming IPOs from a list of participating companies that plan to distribute shares to Robinhood.

I'm betting they won't get many hot IPOs, and not too many shares.

If someone here uses Robinhood I hope they'll share any experiences they have.

 

[njhowie]

It likely won't play well with Robinhood, or the offerings they get access to will be second rate. The issue is that most brokerages place stipulations on the investor, not wanting them to immediately sell and if they see you do sell shortly after IPO, they will bar you from participating in further IPOs. Considering the general mentality which Robinhood fosters among its investors, leads me to come to the conclusion that very few companies will be offering IPO share through Robinhood...again, unless the issuer is desperate and can't work with one of the reputable firms.

 

[USGrant1962]

I don't see how it is any different than ETrade or other discount brokers during the dotcom bubble. I know I was cluelessly applying for IPOs and was allocated and bought a few here and there. None of the ones I got went up multiples of the listing price on opening, though some had a modest pop and I dumped them.

And the SEC or institutional investors won't care a whit about the few shares allocated to Robinhood.