Vlad Tenev participates in the 2020 Breakthrough Prize Ceremony at NASA Ames Research Center on November 03, 2019 in Mountain View, California.
Taylor Hill | Getty Images
Robinhood CEO and co-founder Vlad Tenev will have a paper fortune of over $2.5 billion when the business begins trading, according to an SEC filing. But his genuine payday will remain in the years after, when he might make another $4.7 billion in stock payment.
Robinhood is looking for a market price of as much as $35 billion in its upcoming going public, with a share rate of in between $38 to $42 a share. The offering marks the general public crowning of the questionable investing platform that made “democratizing finance for all” its objective. Yet Robinhood’s countless little financiers have actually likewise produced big fortunes for its creators.
Tenev, 34, and co-founder Baiju Bhatt, 36, will each offer shares worth about $50 million in the offering, according to the SEC filing on Monday. After the offering, they will each own about 8% of the business’s stock, and together they will own about two-thirds of the ballot shares.
Based on the price quote of $38 to $42 a share, Tenev and Bhatt will have each stock worth stock worth in between $2.5 billion and $2.8 billion after the offering.
Tenev and Bhatt might make billions more in the coming years thanks to a generous payment bundle. In May, Robinhood’s board authorized a reward strategy that would award Tenev as much as 22.2 million limited stock systems over the next 8 years if the stock strikes particular targets. Bhatt would get 13.2 million shares under the strategy.
If Robinhood stock strikes the stock targets — which begin at $120 and increase to $300 — Tenev would get stock valued at about $4.7 billion. Bhatt’s shares would deserve about $2.8 billion.
Their huge liquidity occasion comes 8 years after Tenev and Bhatt — who satisfied as physics trainees at Stanford in 2005 — established Robinhood with the goal of drawing in little, retail financiers. Starting with an invitation-only company design, Robinhood has actually taken off, with 22.5 million moneyed accounts since the brand-new filing.
Yet Tenev is likewise personally involved in business’s wider debates. The SEC filing mentions that Tenev has actually gotten “requests for information and in some cases subpoenas” coming from the sweeping examinations into the business’s trading limitations in early 2021. In January, Robinhood limited the purchase of GameStop, AMC and other “meme” stocks due to what it stated was an absence of liquidity to adhere to trading policies.
The limitations caused a wave of class-action suits and criticism from a lot of its traders. According to the SEC filing, a search warrant was performed by the U.S. Attorney’s Office to “obtain Mr. Tenev’s cell phone.”
The business mentions in the filing that, “We are cooperating with these investigations and examinations,” which, “Due to the very preliminary nature of all of these proceedings, we are unable at this time to estimate the likelihood or magnitude of any possible losses related to these matters.”
Robinhood is a five-time CNBC Disruptor 50 business that topped this year’s list.
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