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Robinhood went for a conventional IPO (Preliminary Public Providing) vs the DPO (Direct Public Providing) chosen by Coinbase of their 14 April public inventory debut, however with a rest of conventional six-month lockup guidelines – staff will likely be allowed to promote 15% of their Robinhood holdings instantly, together with one other 15% after three months.
My fictional account of behind closed doorways dialog between the HOOD board and the funding banker underwriters goes like this:
HOOD: “we would go the DPO route and simply pay you a flat payment and bypass all these lockup guidelines”.
Banker: “IPO has a lot better value efficiency. And we will increase capital that HOOD actually wants because the WallStreetBets issues. Our charges will likely be a rounding error.”
HOOD: “OK however what about these lockup guidelines?”
Banker: “we will provide staff an early partial exit”
HOOD: “our early traders need that too”
Banker: “that may crash the worth.
HOOD: “OK, agreed”.