Robinhood's S-1 goes public, detailing big surge in its crypto business unit since the start of 2021

Robinhood's S-1 goes public, detailing big surge in its crypto business unit since the start of 2021

Brokerage app company Robinhood's S-1 filing with the Securities and Exchange Commission (SEC) was released on Thursday as part of the firm's bid to go public.

Broadly, the S-1 detailed the significant financial performance of the firm on the back of interest among retail investors. Among the performance metrics posted: $522 million in revenue for the three months ending March 31, a year-over-year increase of 245%.

Still, Robinhood said that "we recorded net loss of $1.4 billion, which included a $1.5 billion fair value adjustment to our convertible notes and warrant liability" for that period. It was during this time that Robinhood, as well as Wall Street more broadly, was swept up in the so-called meme stock mania around companies such as GameStop. There was also heightened interest in the platform's crypto offerings at that time.

The S-1 showcases Robinhood's strong crypto offering performance, particularly the role that the meme-themed cryptocurrency dogecoin played in that business unit's fortunes.

As noted in the document:

"For the three months ended March 31, 2021, 17% of our total revenue was derived from transaction-based revenues earned from cryptocurrency transactions, compared to 4% for the three months year ended December 31, 2020. While we currently support a portfolio of seven cryptocurrencies for trading, for the three months ended March 31, 2021, 34% of our cryptocurrency transaction-based revenue was attributable to transactions in Dogecoin, as compared to 4% for the three months ended December 31, 2020. "

In terms of quarterly performance, Robinhood said:

"In the first quarter of 2021 alone, we saw over 9.5 million customers trade approximately $88 billion of cryptocurrency on our platform, and we held approximately $12 billion in cryptocurrency Assets Under Custody as of March 31, 2021, a 23-fold increase from March 31, 2020."

Success aside, Robinhood's cryptocurrency business has attracted the interest of regulators. Bloomberg reported earlier this month that the SEC has scrutinized Robinhood Crypto, potentially delaying the firm's public debut as a result.

Robinhood's S-1 also detailed a previously unknown investigation being conducted by the California Attorney General into its crypto business unit.

Though details of the investigation are spares, it appears to be in the context of the state's commodities rules. The document had this to say:

"Additionally, on April 14, 2021, the California Attorney General’s Office issued an investigative subpoena to RHC, seeking documents and answers to interrogatories about RHC’s trading platform, business and operations, application of California’s commodities regulations to RHC and other matters."

Robinhood noted that it is "cooperating with this investigation" and that "[w]e cannot predict the outcome of the investigation or any consequences that might result from it."

This story is developing and new information will be added to this report.

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