Access IPOs

You can invest in IPOs

  • Home
    • About
    • Contact
    • Terms/Privacy Policy
  • Upcoming IPOs
  • Best Brokers
  • Pre-IPO
  • S-1s
This page may contain affiliate links. See the full disclosure here.

Robinhood IPO Access – Everything You Need to Know

May 25, 2021 by Access IPOs Leave a Comment

Robinhood Logo. The Robinhood IPO Access platform is live. Here's what you need to know. On Thursday, May 20th, 2021 Robinhood launched its new IPO investing platform called Robinhood IPO Access.

Reuters had a scoop on this news about two months earlier. I wrote about the platform at the time, but now we know more details. 

In a blog post, Robinhood filled investors in on what to expect. 

With at least 13 million eligible customers, Robinhood will likely be the largest IPO investing platform with the lowest minimum account balance ($0) required for eligibility.

The company has built the platform into its existing mobile application.

Robinhood will not be underwriting IPOs. Instead, it will partner with underwriters and rely on the investment banks for share allocations.

So its success will rely on convincing companies and underwriters to prioritize retail investors alongside the wealthy clients of the largest investment banks. 

Here’s what we know so far.

As of November 2022, opportunities haven’t faired well. An analysis by Bloomberg showed that all 23 IPOs available on the platform to date fell in value. 

IPO Access for Everyone

All customers will have access to IPOs on the Robinhood IPO Access platform. Access will roll out gradually. There’s no way to speed up the process or give yourself a better chance of getting access sooner.

There are no minimum account balances or trading frequencies needed to indicate interest in an IPO. 

Robinhood has at least 13 million customers, so high-demand IPOs will likely have a high number of requests. 

Randomized Share Distribution

Share distribution will be randomized. All eligible customers who request access to specific IPOs will be put in a pool, and the system will randomly select which investors receive shares. 

According to the FAQs:

The amount of shares you request factors into how many you actually get, but it doesn’t affect the likelihood that you’ll get any allocation. You may get all, some, or none of the IPO shares you request. The amount you request lets us know how many shares you’re interested in purchasing.

The First IPO

The first IPO on the platform is expected to be Figs, Inc, which released its amended S-1 on May 20th, which included a clause about Robinhood.

…we currently anticipate that up to 1.0% of the shares of Class A common stock offered hereby will, at our request, be offered to retail investors through Robinhood Financial, LLC, as a selling group member, via its online brokerage platform.

The Figs IPO lead underwriters are Goldman Sachs and Morgan Stanley, which suggests more IPOs led by those two underwriters may make it to the Robinhood IPO Access platform.

The Fig IPO gives Robinhood the chance to test its platform on a smaller deal before potentially facilitating its own IPO (more below). The stock is expected to begin trading on Thursday, May 27th. 

Flipping Policy

Robinhood won’t prevent customers from immediately selling, or “flipping”, shares through the IPO Access program. However, the following consequences will apply:

  • If customers sell IPO shares within 30 days of the IPO, they will be restricted from participating in IPOs for the next 60 days.
  • Broad-based flipping could reduce the underwriters’ willingness to allocate shares to Robinhood IPO Access customers. 

This policy may be subject to change if investors are flippant on the flipping rules. 

Will Customers Receive Shares in the Robinhood IPO?

Reporting in January by Bloomberg suggests that Robinhood customers may receive access to shares in the Robinhood IPO.

There was no confirmation of this in the May 20th blog post announcing Robinhood IPO Access. 

But the timing looks good. On Tuesday, May 18th, Bloomberg reported that Robinhood may release its S-1 filing as early as this week. If true, investors could be buying Robinhood stock before the end of June. 

The Robinhood S-1 filing will give us insight into company financials, risks, the stock symbol, etc.

Watch for a directed share program or mention of Robinhood as a selling group member.

These stock symbols all appear to be available — ROBN, HOOD, RBHD, RHF, RHD. RH, Restoration Hardware, is not.

By offering IPO Access to all customers, Robinhood is now one of the best brokers for IPO investing.

The question remaining is how effectively Robinhood can partner with underwriters to attract shares to its platform. 

Sign up with Robinhood to join the new Robinhood IPO Access platform. 

Directed Share Program

As of November 2021, Robinhood has expanded its IPO offerings to include directed share programs, according to Reuters. Directed share programs allow underwriters and issuing companies to direct a percentage of shares to affiliates. 

Affiliates can mean anyone the company wishes to include. However, it’s sometimes utilized to offer shares to company customers. Airbnb, Uber, and GoPro all offered IPO access via directed share programs to hosts, drivers, and customers. 

The new offering could expand the way Robinhood pitches startups looking to IPO. 

Final Thoughts

The Robinhood IPO Access news is a big step toward giving IPO access to everyone. This website has been advocating for this since the early days of LOYAL3.

Robinhood is tapping into its massive user base to give everyone an equal shot at investing in hot IPOs. 

Of course, not everyone can invest in every high-demand IPO. But by randomizing allocation distribution, Robinhood is making the process fairer given the current environment. 

Topic: Brokers, Homepage, Insight, News, Underwriting

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

  • Email
  • Facebook
  • Twitter

ADVERTISING DISCLOSURE: This website engages in affiliate marketing. This means that if you use an affiliate link to make a purchase, the website will receive a commission on that purchase. All efforts are made to ensure that affiliate links are disclosed in accordance with the FTC. The Website uses Mediavine to manage all third-party advertising on the Website. This website is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and links to Amazon.com. ADDITIONAL DISCLAIMERS: Read the full Disclaimer policy here. Opinions, reviews, analyses and recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. We have made every effort to ensure that all information on this website is accurate. We make no guarantees regarding the results that you will see from using the information provided on the website. We are individual investors, not financial advisors, tax professionals or investment professionals. All information on the site is provided for entertainment and informational purposes only and should not be considered advice. Do not make investment decisions based on the information provided on this website. This website may discuss topics related to finance and investing. The information provided on this websites is provided “as is” without any representations or warranties, express or implied. The website makes no representations or warranties in relation to the financial and investing information on the website. You must not rely on the information on the website as an alternative to advice from a certified public accountant or licensed financial planner. We assume no responsibility for errors or omissions that may appear in the website. You should never delay seeking financial advice, disregard financial advice, or discontinue professional financial services as a result of any information provided on the website. Icons by Freepik, Dave Gandy from www.flaticon.comis licensed by CC BY 3.0

  • Home
  • Upcoming IPOs
  • Best Brokers
  • Pre-IPO
  • S-1s

© Copyright 2023 Access IPOs · All Rights Reserved · Disclaimer · Disclosure · Privacy