so we got some news from bloomberg on robinhood's plans for its own ipo
today i thought i'd share that news but also look at how successful the first ipo access with figs
stocks was and answer some questions that came up on the last video had plus we had a little
poll and just to see who actually got shared so i'll give you some of the results from that
but first welcome back i've been so super busy as of late that i had to step away from the channel
last week but but one of the things i did was a little home renovation project that i had heard
about and i tried it and well has nothing to do with investing it has a lot to do with saving a
lot of money so think about making a video on that and give you a chance to see it maybe a little
different side of me and see what i'm good at and maybe what i'm not so good at but anyways enough
about me let's talk about robin hood now before we talk about robin hood's first foray into offering
ipos with figs let's talk about some reporting from bloomberg on a robinhood ipo that we've
been expecting and we know it's coming because as we've talked about before on the channel
they filed confidentially in march of course this is from reporting of people who don't want to be
identified so keep that in mind this is far from official but after some initial expectations that
robinhood's ipo could come in june according to bloomberg in their article it looks like robin
hood is planned to hold its ipo in july sometime after the 4th and they want to do it because
they want to get people all back from the holiday and ready to to invest so so as far as valuation
and we've talked about this before whether we talked about it on the six big upcoming ipos
for 2021 or when i made that case for robin hood having an ipo this year it looks like valuation
is coming in at least 40 billion dollars based on some of the trading in the private markets now i
know a lot of people out there got turned off from robin hood based on the gamestop fiasco in january
which led to a congressional hearing which you know sort of made people wondering if the ipo
was going to happen but um and what would happen actually though was that robinhood
just kept getting more business more more users came on in fact in according to cnbc they added
like three million users in january alone that month and then with the crypto trading um you
know which has been obviously big it's been a boom and bust thing over the last couple of months but
they've added about three million users a month and during that first quarter so they've added
over nine million users um you know as far as the numbers that we have right now just for 2021 in
trading crypto so at this point there's a lot of unofficial numbers and reporting out there
so i really can't wait to see the public filing you know when i get that i'll definitely dig
through it and i'll share the details with you so if you haven't subscribed to the channel yet
you might want to do that so you don't miss that information now moving on the second thing i want
to talk about was robinhood's ipo access and i had planned to actually talk about this last week
after they had their first offering with figs but as i said i got busy so i'm going to add
it to this video but the intriguing part to me with this is that the product or the service
you know really is intriguing to me because of one of the most common questions i get ever
since i started covering ipos on the channel was how to get ipo shares now today i want to talk
about how successful that the retail investors were with robinhood's first ipo offering was
and also to answer some of those questions that i've gotten based on that last video i put out
so to get everybody up to speed you know if you're new here in late march robinhood announced that
they were looking at offering ipos to their own customers regardless of account balance
which is a big thing because i've shared you know many of the comments and live streams and whatnot
a lot of times there are ways for retail investors to get into ipos but you usually have to have
a lot of money you have a lot of money in your account and when i say like a lot of money like i
mean a lot of money and so so really the everyday retail investor didn't really have a chance
and that is nothing is more frustrating when you know you see institutional investors get
the prices of shares at one price and the next day the stocks trading double but you you were
shut out on that but before they announced this which i believe i did a video on that day and
it was the same day so far i announced that they were going to offer ipo shares to their customers
there had already been reports that robinhood was going to bring in its or allow its own users
and customers to participate in their own ipo so we already knew this was likely to happen
but again when in march when they made the announcement that they were going to offer ipos
beyond just their own company it's a big deal and then on may 20th they announced that they
would officially call this ipo access now what was interesting was on that same day figs who's
a healthcare clothing company you know ready to go public they had put out an amended filing
that they anticipated up to one percent of the shares of their class a common stock offered
would be offered to retail investors to robinhood through its online brokerage platform now if that
meant was that fixed was robinhood's first ipo offering and when i say that i don't know if
that really makes sense because it's really saying initial public offering offering but
regardless um so anyways i put a video on it and got some comments from many of you who were in on
the ipo or at least tried to get in on it and so it's a quick refresher fig stock was priced at 22
for the ipo um so that was the ipo price it closed the first day up over 30 percent so this was what
everybody wanted you know you have that access to that initial pop however as i was reading the
comments there's a lot of people that thought that they were had shares and then they didn't
and so i got a lot of comments in that previous video of frustration from orders being canceled
now while robinhood makes it clear that there's no guarantees of getting allotments that you'll get
all of which you requested um it definitely seemed like there was a lot of negativity
after the the trading started and a lot of people were shut out on the ipos and you know robin hood
will obviously never be able to offer every ipo out there and it's probably going to be
even harder to get shares once you're talking about companies there's a lot of interest in
you think last year snowflake you know everybody and their mother went in on that ipo price
um the odds you probably would have gotten or were probably low but of course when you think
you are able to participate and then of course you don't even if you're understanding it's random
and maybe you didn't understand ceram but now of course robinhood has had their share of issues
but this really wasn't one of them because whether it's robinhood or any other
you know place you can get ipo shares there's never guarantees of getting allotments
but the problem is is here it seemed like the majority of the comments were negative and that
of course is going to be just another thing that leaves a bad taste in people's mouths so
anyways what i was wondering was how many people got shares you know did you you requested an
allotment and that you got some so i put up a poll and this was a very unofficial poll um because
the results don't meet any scientific standards of statistical significance um we had like i think 35
people responded and so if you know anything about statistics uh this study was very underpowered but
to share the numbers with you guys um we had 20 of those people got shares and 80 of people didn't
so i personally i think that that's probably a stronger number than i would have expected
um however you know i wasn't sure how many people would actually be interested in getting figs stock
and i know that there's some people that probably aren't interested in the company they just wanted
to be in an ipo which i get but you know a different company i maybe if it was that snowflake
of last year or you know somebody like that perhaps that the percentage would have been a lot
lower because again there's only so many shares available and the more people that won them you're
going to disappoint some people but again i think it's still the opportunity is to get in ipos where
before you just didn't have that opportunity and again just basically having a random chance to get
it because you don't have to have any certain criteria you have to meet as far as again how
many uh how much money you have in your account but anyways there were some questions that came
up in the comments and i thought you know i would not pull anybody's name out because some of these
were multiple questions from different people but i thought it'd be helpful just to answer
them so for anybody interested so the first question is why were shares priced at 22.
well as you guys know we talked usually we put out a video before the ipo happens and the ipo
itself is actually the day before trading it's not the day the trading begins and so usually
going into the ipo there's a range where there's expectations of where the shares will be priced at
and what happens is you have all the people involved you have the underwriters there
you have institutional banks and based on interest is how the shares will be priced so you look at
the figs stock being priced at 22 it's because the people that look into this they felt that
was a fair value and typically you know the ipo price is probably a little lower um than where
we'll expected to trade you know not looking at last year where everything went crazy but
um but typically the prices you know they look at all the number they get evaluation and then the
ipo price tends to be a little bit less than that so how the price got was not because you put it
some people said they might have put 22 dollars in it wasn't priced at that because you thought that
was your request and when you requested it with the range you wanted it just was what the ipo was
priced at so based on the amount of shares they have the cell and again how much interest there is
the institutional investors the underwriters the company they all came together and basically 22
dollars is what the institutional investors were willing to pay for the shares so that's how that
came about another question was do i have to wait to sell my shares so robinhood talks about
this on their website and it talks about their flipping policy and what it says is that robinhood
won't prevent you from selling shares you get through the ipo access program however if you
sell those ipo shares within 30 days of the ipo is considered flipping and you'll be restricted from
participating in ipos for 60 days now one of the concerns from robinhood is that if there is a lot
of flipping that that could lead to them getting less access to ipos in the future from different
companies and sofi who i mentioned earlier was also looking to offer ipos to its customers
i'm noted this concern as well so you just have to keep in mind that companies that are issuing stock
and their underwriters they really don't want that stock being flipped a lot it just causes a lot of
volatility and so that's why historically they've gone to the institutional investors
so it is what it is it's not saying you can't do it but um again based on robinhood's
you know guidance is if you do it um you're gonna be shut out for the next 60 days and then the last
question i just want to answer and probably the biggest one this is from the 80 of the people
that didn't get shares is why didn't i get the ipo shares i requested now that could be a few reasons
for this um the big reason probably for figs of stock was that just what enough shares for the
request that they had and you know being that this was the first ipo access you know offering
there probably was a lot more interest in it than you know than you might have expected
otherwise for this company uh so basically what robin hood says is that they randomly select
um and who get the opportunity to get the shares as again there's just no guarantee um and they
do say it's random which again is generally a good thing now of course if you have a lot of money you
can request to get the shares you know through one of the big companies that do offer them but
again keep in mind that you know as they it's figs where i'm hosing get one percent of those shares
um so again if it's based on customer demand and the more demand and those limited amount of shares
you know you're gonna get shut out now another thing and this is again according to robinhood
directly is if the price of the stock were to end up outside the price range by more than
20 percent whether up or down um you have to then go out you then have to actively
reconfirm whether or not you're still interested in purchasing the stock of the new price
so if you don't do that and you have a sort of a time frame to do it they'll cancel your request so
don't think this was an issue with the fig stock but it's probably one in the future that could be
an issue and if you have that question so anyways a lot of this guidance is directly on robinhood's
webpage so you can definitely check that out as well so anyway just some information on
robinhood and ipos and i know a lot of you have interest in that particular watch this channel
when it comes to investing we talk a lot about ipos here and even though the channel was never
meant to be just about ipos um you know so much interest there that we've been talking about it
although i know that interest is going down and i i think part of it is because of the frustration
with ipo performance after the fact so the uh ability to be able to get ipo shares at ipo prices
where people can do a little bit better i think it is good um definitely good for retail investors
and of course i know a lot of you use robinhood and i know they've had their controversies but
they really have really changed the game for investing for retail investors so
they're important and so we'll definitely there's a lot of interest in there so we'll be following
them through their ipo and again as i get the public filing i'll share that information with
you guys so at this point uh once again thanks for coming back again sorry i wasn't on here last week
so anyway if you haven't done it yet please like the video it's really important for me to know
you enjoy videos like this so i can keep making them and also it really is important for youtube
because um the more people like the video the more likelihood they'll send it to more people
and of course the more people that see it can join our community and we can share more information
with each other which is really what the channel is all about so anyways i hope you have a good
rest of your day and i hope to talk to you guys soon thanks for sticking with me take care
you