[imagesource: Robinhood]
The co-founders of Robinhood, one of the first apps known for offering commission-free trades of stocks and exchange-traded funds, are already billionaires.
Vlad Tenev, 34 (left), and Baiju Bhatt, 36 (right), met as undergraduates at Stanford University in 2005 and appeared on the Forbes billionaires list last year, when the app, which was introduced in 2015, was valued at more than $11 billion.
Each co-founder owns an estimated 10% stake in the company, giving them a net worth of $1 billion each.
The COVID-19 pandemic also helped the company achieve momentum, bringing its active users to 18 million as bored Millennials used the app to trade stocks and options for free during quarantine.
Now, the co-founders are on the road to making even more money.
On Thursday afternoon, they filed for its initial public offering (IPO), divulging $959 million in revenue for 2020 as retail trading boomed, which is up 245% from 2019, according to Forbes.
Tenev and Bhatt could earn billions of dollars in the coming years from this S-1 filing:
In late May, Robinhood’s board approved awards of 22 200 000 and 13 320 000 restricted stock awards to Tenev and Bhatt, respectively, which will vest over eight years after its IPO depending on how the company’s stock performs.
If Tenev and Bhatt achieve each of the price-based stock milestones, which range from Robinhood reaching $120 a share to $300 a share, the total award could be worth around $7,5 billion.
That means that Tenev has the potential to earn about $4,7 billion, while Bhatt could make over $2,8 billion.
Cool, cool, cool.
But Robinhood’s IPO and surging valuation come at a time of both rapid growth and deep problems for the company.
There’s a large investigation into some trading restrictions that it put in place amid a surge in meme stock trading in early 2021:
According to its S-1, CEO Tenev and others at the company have received requests for information and subpoenas related to trading restrictions it put on stocks like video game retailer GameStop and movie theatre chain AMC Entertainment.
The company’s incredible growth has led to technical problems and regulatory investigations into the suitability of its offerings, too.
Not to mention how there is scrutiny into how exactly Robinhood earns its money.
You can read more about it at Forbes, but either way, Robinhood’s co-founders stand to make billions from their company once it goes public.
[source:forbes]
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