Robinhood and "democratising" IPOs

Second post from the Margins Substack that I'm sharing, this time on Robinhood's IPO programme.

Robinhood and Democracy Promotion
Opening up the IPO club
In March 2021, Robinhood announced they (Note 1) would be building a platform to give everyday investors access to IPOs. It really was the perfect ‘democratizing finance’ story. Until they pushed this, the IPO allocation process was the poster-child of clubby, insider-y, and banker-y. [...] It was so easy to conjure up images of backrooms with oak furniture and cigars.

The post goes on to show how every single one of the IPOs they pushed out through marketing emails masquerading as transactional emails crashed after IPO, leaving many retail investors with massive losses. Democratised finance indeed.