Few companies have seen their profile rise more quickly in the past year than Robinhood. For better or worse, it will always be linked to the notorious late-January rush on GameStop and AMC stock — that’s still ongoing, by the way — and the financial services company intends to further expand its profile by going public this week.
It’s doing so in a fairly unorthodox way, by relegating 35% of its shares to existing customers of the popular stock trading app. There’s ample speculation about what this means for Robinhood’s competitors and the broader stock market, which should clarify a bit after sales open on Thursday.
According to a recent CivicScience study, the general public’s familiarity with Robinhood has significantly increased since Q3 2020. The share of Americans who have never heard of the stock trading app has declined 41% since last fall, and consumers who’ve used or intend to use Robinhood have doubled over that same period. Just 18% of the Gen Pop 18 and older are at least somewhat likely to purchase Robinhood shares.
For the time being, potential Robinhood stock purchasers overlap significantly with the app’s existing or intended users. Nearly two-thirds of Robinhood users are at least somewhat likely to take advantage of the company’s stock allocated for them, and an even larger chunk of intending users are thinking about buying up shares of the company. Interest dips off significantly among non-users, but a sizable 8% of those not interested in becoming a user of Robinhood are thinking about buying some stock.
Robinhood has been particularly attractive to young traders, who have sometimes found themselves beyond their depth. The company’s stock prospects skew heavily in this direction as well, with nearly half of Gen Z respondents at least considering purchasing Robinhood stock. This rate significantly outpaces any other age bracket.
Nearly everything about Robinhood’s early success has been predicated on the Gen Z user base and a sense of unpredictability. Don’t expect that to change as the company goes public, but expect many of the app’s users to take the IPO plunge right alongside it.