Can retail investors finally bypass Wall Street to buy into new IPOs?

Robinhood aims to disrupt the traditional IPO process by allowing its users to purchase shares directly during a company's initial public offering. This video explores how the platform intends to challenge the long-standing dominance of institutional investors in stock market flotations.

Historically, individual traders have been excluded from buying new stock until it begins trading on the open market. This creates a significant disadvantage, as institutional investors often secure early allocations that benefit from the initial price surge. In 2020, U.S. listings experienced an average first-day trading pop of 36%.

Robinhood is developing technology to democratize this process, starting with its own IPO under the ticker HOOD. By carving out up to 35% of its shares for its 13 million users, the company seeks to erode the tight control investment bankers hold over allocations. The FIGS IPO served as the first test case for this retail-focused strategy.

Source: Robinhood IPO Access $HOOD