How Robinhood’s IPO “roadshow” was different from most

Robinhood took a different approach to the usual “roadshow” companies undertake ahead of an IPO.
Robinhood took a different approach to the usual “roadshow” companies undertake ahead of an IPO.
Image: Reuters/Dado Ruvic/Illustration
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Robinhood seems to pride itself on doing things a little differently.

For one thing, the company is among those trying to change the finance landscape by opening it up to retail investors with its commission-free trading app. As it gears up for an initial public offering expected on July 29, it also took an unorthodox approach to the usual “roadshow” that companies host for prospective investors in an IPO.

The format allowed it to reiterate how different it is from the establishment in finance, sending a message to both existing customers and interested investors. Here’s how it broke from tradition.

In keeping with its mission, Robinhood aimed its roadshow at retail investors

Usually companies will do a circuit of meetings with institutional investors, such as hedge funds and pension funds, where management can introduce itself in person and talk up the company. It’s not a process typically geared toward—or even open to—the general public. But Robinhood, which says in its prospectus that its mission is “to democratize finance for all,” allowed anyone interested to tune in.

The move showed its commitment to retail investors—and also made sense given it expects as much as 35% of its shares to be bought up by Robinhood customers via the “IPO Access” feature on its platform.

The Robinhood IPO roadshow was held via livestream

The way Robinhood was able to open up access to its roadshow was to stream it online so anyone with an internet connection could tune in. It’s hardly the first company to hold a virtual roadshow in the pandemic, but these digital events are typically not available in a public livestream.

Robinhood held its roadshow on a Saturday

Institutional investors typically attend roadshows during the workweek. But plenty of retail investors with full-time jobs depend on their non-working hours for their investment activities. In holding its roadshow livestream on a Saturday, Robinhood was again sending a message about who its customers are, including those retail investors who might want a piece of the company in its IPO.

Prospective investors in the Robinhood IPO submitted their questions in advance

Since it did the event over livestream, answering all the questions it received in real-time probably would have been chaotic. Robinhood handled the issue by taking questions in advance, which also meant it got to choose which ones to answer.

Many of the queries it responded to arguably weren’t too helpful, unless you wanted to know that co-founder and CEO Vlad Tenev’s favorite planet is Pluto. But it emphasized the point that Robinhood’s focus is on opening investing to a wider crowd. Tenev’s answer, incidentally, could be read as going against established thinking, too, since Pluto isn’t a full-fledged planet.