Get 40% Off
🚀 Our AI Picked 6 Stocks that Jumped +25% in Q1. Which Picks Will Soar in Q2?Unlock full list

Robinhood Jumps as it Files to Terminate Share Sale from Backers

Published 12/08/2021, 05:35 AM
Updated 12/08/2021, 05:36 AM
© Reuters

By Dhirendra Tripathi – Robinhood stock (NASDAQ:HOOD) traded nearly 5% higher in Wednesday’s premarket, benefiting from the removal of a a near-term overhang on the stock coming from early backers who wanted to cash out.

The online trading platform said Tuesday it is seeking a termination of the resale of its shares by certain investors including affiliates of venture capital firms Andreessen Horowitz and Ribbit.

As part of its initial public offering, the company was under a contractual obligation to let those early shareholders dispose of some of their stake. With that obligation having now expired, it has sought to terminate the relevant part of the contract.

The shares accrued to their holders upon automatic conversion of some of the company’s debt in connection with the IPO. The company went public on July 29 with each share issued at $38.

According to an August 5 filing with the SEC, Robinhood registered the sale of around 98 million shares - over 10% of the group's overall capital - by early shareholders. Robinhood wouldn't have received any of the proceeds.

The termination will take effect as soon as the SEC declares the amendment effective, Robinhood said in a statement.


Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.