Connect with us

Business

Robinhood is reportedly prepping for IPO later this month

Published

on

Robinhood is reportedly prepping for IPO later this month

After getting roasted for its role in the January market meltdown and hauled before Congress in February, Robinhood is reportedly angling to go public in March.

The no-fee trading app for millennials is eyeing an initial public offering later this month and plans to file confidential IPO paperwork with the Securities and Exchange Commission in the coming days, according to a report from Bloomberg that cited unnamed sources (paywall).

It was widely reported that Robinhood had hired Goldman Sachs to do its IPO last year. Goldman didn’t immediately respond to a request for comment.

Valued at $11.7 billion after a funding round last September, Robinhood is hoping to convert some of that financing into equity. A first tranche will convert at a $30 billion valuation or a 30 percent discount to the IPO, whichever is lower, Bloomberg reported.

The company also has considered selling shares in its IPO directly to its own users, according to the report. That could be a possible olive branch to day traders who got burned by the app’s clampdown on buying and selling GameStop and other “meme stocks”.

Robinhood cracked down in order to appease its clearinghouse — a move that sparked outrage and accusations that the app was conspiring with the Wall Street firms that pay Robinhood for the right to execute its trades, claiming that they worked together to kill the manic short squeeze.

“You know everybody here who’s watching this hates your guts, right?” Bartool Sports founder Dave Portnoy — who has become a hero for day traders during the pandemic — told Robinhood CEO Vlad Tenev in a Feb. 24 interview. “You killed the little guy.”

Tenev admitted to members of Congress that mistakes were made during his testimony a week earlier, but defended his decision to prevent users from trading the meme stocks while he sought $3.4 billion in emergency liquidity to meet his capital requirements in the chaos of the Reddit Rally.

As a public company, Robinhood would have access to the kind of market liquidity that could make situations like that easier.

But in addition to the Reddit Rally fiasco, Robinhood’s most recent regulatory filing disclosed that the company might pay more than $26 million in regulatory fines to the app’s multiple service outages in 2020 that left customers fuming and unable to communicate via a help line, the lack of which is a violation of a Financial Industry Regulatory Authority rule.

The company also admitted that FInra and the SEC are probing its role in the 2020 suicide of an amateur options trader who blamed his decision on losses on his Robinhood account in a note he left behind for his family.

In December, Robinhood paid $65 million to settle charges from the feds that it misled users about how it was making money and failed to deliver the best execution it had promised on trades.

Continue Reading
Advertisement
Click to comment

Leave a Reply

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

Business

El Salvador volcanoes to power bitcoin mining

Published

on

El Salvador volcanoes to power bitcoin mining

Bitcoin is red-hot in El Salvador — and the country says it plans to use power from its volcanoes to mine it.

El Salvador President Nayib Bukele — just hours after the country’s legislature approved the “Bitcoin Law,” making it the first to accept Bitcoin as legal tender — revealed Wednesday that the nation’s state-owned geothermal electric company will harness volcanic energy to mine the cryptocurrency.

Bukele said the country is already designing a mining hub that will use “very cheap, 100% clean, 100% renewable” energy from volcanoes to power the operation, which effectively would be a bank of super-powered computers that solve the complex mathematical equations required to mine Bitcoin.

“Our engineers just informed me that they dug a new well,” Bukele tweeted, saying it would generate 95 megawatts of energy — enough to power more than 500 homes for a year. “What you see coming out of the well is pure water vapor.”

Bukele — who is looking to lower transaction fees on the $6 billion in yearly remittances sent to its citizens from abroad — has yet, however, to reveal when the new operation will be live or how many Bitcoins he expects to be able to mine.

It’s been a bullish week for Bitcoin in El Salvador. The digital coin can now be used as payment for goods, services, and taxes in the public and private sector. Bitcoin rose 6 percent on the news, according to data from Coindesk.

According to a study by Cambridge University, Bitcoin mining consumes more energy per year than the Philippines. Elon Musk has met with Bitcoin miners about environmental concerns, recently citing them as he announced Tesla would no longer accept Bitcoin as payment.

Details about the mining efforts and how El Salvador will widely adopt Bitcoin remain vague. The law states it will provide “the necessary training and mechanisms” to allow the 70 percent of its citizens that don’t have access to traditional banking services to understand how they can use Bitcoin but didn’t elaborate.

Still, Bukele remains an enthusiastic advocate for the currency and his mining project. Late Thursday he tweeted drone footage of the new mine with a rainbow in the background.

Continue Reading

Business

China arrests 1,100 crypto users on money laundering charges

Published

on

China arrests 1,100 crypto users on money laundering charges

China’s crackdown on cryptocurrencies is heating up with a series of arrests that suggest digital currency users can be traced.

More than 1,100 people who allegedly used cryptocurrencies to launder profits from frauds were arrested Wednesday, the country’s Ministry of Public Security said in a statement. 

The busts involved 170 criminal groups who authorities say hired “coin farmers” to open crypto accounts after bank accounts they used for their alleged scams had been seized.

“The high illegal income attracts a large number of people to participate, causing serious social harm,” the ministry said of the alleged plots.

The arrests may cast further doubt on the supposed un-traceability of cryptocurrencies. On Tuesday, the price of bitcoin fell almost 12 percent after it was revealed that US authorities were able to reclaim most of a bitcoin ransom that Colonial Pipeline paid to hacker group DarkSide in May. 

“Criminals have been using bitcoin because of the supposed inability of governments to get at it,” Anthony Denier, CEO of trading platform Webull, told the Post on Tuesday. “If governments can claw it back, that hurts its appeal.” 

Wednesday’s arrests are part of a broader Chinese crackdown on crypto. They come less than a month after the government called for greater regulation of digital currencies.

A committee presided over by a member of China’s Politburo wrote in May that it is necessary to “crack down on bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field.” 

Worries about bitcoin’s traceability and the looming threat of government regulations have sent the cryptocurrency plummeting from its peak of more than $63,000 in April. Bitcoin was trading at about $37,600 Thursday morning. 

Additional reporting by Will Feuer

Continue Reading

Business

Burger King flambes Chic-Fil-A online, donates to LGBTQ foundation

Published

on

Burger King flambes Chic-Fil-A online, donates to LGBTQ foundation

They just served them a double whopper.

Burger King may have lost the restaurant-chain battle, but they’re charging ahead in the sandwich wars: The burger monger flame-broiled queer-rights critic Chick-fil-A in a Pride Month tweet in which they pledged to donate the proceeds from their new chicken sandwich to an LGBTQ charity. The provocative post currently boasts over 7,000 likes online.

Burger King tweeted last week that 40 cents from every one of their new hand-breaded Ch’King sandwiches sold during June will go to the Human Rights Campaign, which is the world’s largest LGBTQ-rights organization, Fox News reported. BK will contribute up to $250,000, according to the tweet.

The patty purveyor doubled down with a shot at Chick-fil-A, writing that the deal is good “even on Sundays,” when the devoutly Christian chicken chain shuts its doors.

The verbal whopper comes after years of opposition to Atlanta-based Chick-fil-A, which contributed millions to organizations that opposed same-sex marriage. In turn, that got the restaurant banned from several airports and schools across the country.

In 2019, Chick-fil-A announced that it would no longer donate to the Salvation Army, the Fellowship of Christian Athletes and other groups that have been criticized for their stances on LGBTQ issues.

BK is surely hoping the charitable act will help give the chain a leg up in the ongoing battle for chicken-sandwich dominance, which Chick-fil-A is currently winning in terms of total sales.

The chicken-driven competition began in 2019, when Popeyes’ new sandwich sold out at many of its stores after just two weeks on the menu. 

Since then, the largest US fast-food chains, from KFC to Wendy’s, have introduced new chicken-laden menus or announced plans to do so.

Continue Reading

Trending