In a note on its website, Robinhood indicated that investors who sell shares under the recently launched IPO access program face the possibility of being restricted from participating in future deals for two months. However, the company noted that the retail investors are free to sell the shares, but they will bear the consequences. According to Robinhood: Notably, Robinhood rival SoFi that runs a similar program, has also initiated punitive measures for investors selling their IPO shares. Currently, SoFi fines investors who sell shares during the first-day boom.
Democratizing investing
In May, Robinhood launched the IPO access initiative as part of democratizing investing. In addition, the platform was launched to cater for all customers with no account limitations. Through the program, clients can request to buy shares at their initial listing price range. When the final price is set, clients will be able to go through with the purchase, change or cancel. Medical scrubs manufacturer FIGS Inc was the first company to earn a listing on the IPO Access platform. At the same time, Robinhood is also expected to go public in 2021, reportedly filing papers with the SEC. The new Robinhood product comes after the platform witnessed significant growth in 2020, attracting young investors amid the coronavirus pandemic. The growth also escalated in 2021 with the emergence of meme stocks like GameStop and AMC. [robinhood]
