Robinhood Reveals Surging Loss This Year!

Robinhood filed for an initial public offering, disclosing it became profitable last year only to have its losses skyrocket in the first quarter amid the so-called meme stock frenzy, in whats expected to be one of the highest-profile listings the year.

The company, which pitches its trading platform to novice investors, listed the size of the offering as $100 million, a placeholder that will change when it sets terms for the share sale. Thursday‘s registration statement follows Robinhood’s announcement in March that it had filed confidentially to go public.

Robinhood said it generated net income of $7.45 million on net revenue of $959 million in 2020, compared with a loss of $107 million on $278 million the previous year, according to the filing.

The companys revenue surged during the first quarter, exceeding $522 million compared with $128 million for the same period last year, according to the filing. Its losses rose astronomically, though, from $53 million for the three months ended March 31, 2020, to $1.44 billion in the most recent quarter.

That loss was mainly tied to convertible notes and liabilities from its emergency fundraising, when it was rushing to deal with the volatility of trading in GameStop Corp. and other popular stocks. Robinhood gathered more than $3 billion from investors over a few days

Cryptocurrency trading on Robinhood was booming in the first quarter, with 17% of its total revenue involving transactions related to it.

Robinhoods potential valuation will be more clear when it discloses the number of shares it plans to sell and the proposed price range for them. Bloomberg Intelligence analyst David Ritter has said the company could be worth as much as $40 billion.

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