Robinhood sets stage for IPO despite legal dramas

Setting the stage for its hotly anticipated IPO, Robinhood Markets revealed rapid growth in users in a filing on Thursday (July 1).

But it also flagged a swathe of investigations by prosecutors and regulators.

The company is under scrutiny after this year's trading frenzy for so-called meme stocks such as GameStop.

Reuters has reported that Robinhood is aiming for an IPO valuation of over $40 billion.

The IPO filing detailed for the first time how the trading mania among amateur investors fuelled a four-fold jump in its revenue between January and March.

But its handling of the meme stock frenzy was marred with glitches.

And attracted the wrath of many of its users and U.S. lawmakers.

A probe by the U.S. attorney's office in California resulted in a search warrant for co-founder and CEO Vlad Tenev's cell phone.

The company was also sued this year by the family of a 20-year-old stock trader who committed suicide, citing the app's "misleading communications".

Robinhood was founded in 2013 by two Stanford University roommates.

It's raised over $5.5 billion from investors since its launch.

According to sources, the app's valuation nearly tripled in the last year alone, valuing the company at around $30 billion.

The online brokerage plans to list on the Nasdaq under the symbol "HOOD."

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