Not all firms that failed on the stock exchange went bankrupt. For example, some companies, eventually, grow richer. The most illustrative example of such a company is the scandalous US broker, Robinhood.
The company had a rather dubious reputation. Therefore, its listing on the NASDAQ exchange was perceived by many investors as a strange move. So, it is no surprise that the company had to deal with a monster-sized setback afterwards. During the IPO, Robinhood’s opening price totaled $38 per share, which was considered rather low. Altogether, the company raised about $2 billion. During listing, the broker was estimated at $32 billion. However, even a bad start made the company’s creators richer. Robinhood’s co-founders, Vlad Tenev and Baiju Bhatt own about 8% of the company. It was worth about $1 billion before the listing. Their stake more than doubled during the IPO.
Tenev and Bhatt sold 1.2 million Class A shares for almost $48 million. After taxes, this sum may fall to $36 million. Over the next eight years, they may receive additional 22.2 million and 13.3 million shares respectively. Thus, Tenev is likely to get stock valued at about $4.7 billion. Bhatt’s shares may be worth about $2.8 billion.
