Robinhood was hoping to have its IPO in June, but, that does not look like a realistic expectation any longer.  Any #wallstreetbets people out there would be wrong in thinking this has anything to do with the GameStop issues and halting trading earlier in the year. The issue with the IPO is actually related to Crypto. 

While the SEC is not releasing specifics, people close to the situation say that Robinhood’s trading in cryptocurrency is slowing up the approval.  This should not be a surprise as we are seeing non-stop comment from Washington on the need for regulation and oversight with cryptocurrency. 

It does not seem that this is anything more than a speed bump on Robinhood’s way to an IPO.  While they may not have their June date, they are still expecting to be public by late summer or fall. It is positive that Coinbase went public earlier in the year and they are a business solely based in the crypto world. A lot has happened since the Coinbase IPO, though, and the SEC getting a better understanding of the volatility, scamming and other illegal behaviors that are making news recently seems to be an obvious concern.

I can see why the SEC is putting the brakes on the IPO. While the SEC has not responded to news outlets for clarification about the delay, Robinhood is known for attracting young investors that are new to the game.  More than half of their customers are investing for the first time on their app. While for years trading in crypto took some knowledge and understanding, with Robinhood, it is just a few clicks to get started. Robinhood has taken some heat for this, with young investors losing money.  Warren Buffet has said it was gambling when you traded with Robinhood. (Warren Buffett can also keep his mouth shut if you ask me.)

There is also some concern that Robinhood’s IPO could continue the pump and dumps that have been happening lately in the crypto and stock world.  Retail investors are using Robinhood to buy GameStop and Doge and other flyers based on social media posts.  Sending the stocks on a roller coaster of a ride. 

While all signs point to Robinhood going public before the year is out, this is a sign that the SEC is concerned about the new type of investors that are out there. My thought is that these young people are learning early, and may loose some money while getting started, it is a small price to pay for the education they are receiving.