Robinhood leaps up as he files a case to end the sale of donor stocks By Investing.com
By Dhirendra Tripathi
Investing.com – Robinhood (NASDAQ 🙂 stock traded nearly 5% higher in Wednesday’s pre-market, benefiting from the removal of a short-term surplus on the stock from top backers of funds that wanted to cash out.
The online trading platform announced on Tuesday that it was calling for a halt to the resale of its shares by certain investors, including subsidiaries of venture capital firms Andreessen Horowitz and Ribbit.
As part of its initial public offering, the company had a contractual obligation to let these first shareholders sell part of their stake. As this obligation has now expired, it has sought to terminate the relevant part of the contract.
The shares were acquired from their holders during the automatic conversion of part of the company’s debt as part of the IPO. The company went public on July 29 with each share issued at $ 38.
According to an August 5 filing with the SEC, Robinhood recorded the sale of around 98 million shares – more than 10% of the group’s overall capital – by the original shareholders. Robinhood would not have received any of the proceeds.
The termination will take effect as soon as the SEC declares the amendment effective, Robinhood said in a statement.
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