Wednesday Robinhood was slapped with a record $70 million fine. Thursday, the company began jetting toward an IPO.

The IPO plan follows a series of regulatory headaches for the free-trading app. On Wednesday, Robinhood was ordered to pay about $70 million for “systemic supervisory failures” and hurting investors by giving them “false or misleading information.” That’s the largest penalty ever imposed by Wall Street’s self-regulating body, the Financial Industrial Regulatory Authority, or FINRA.

FINRA’s sanctions on Robinhood focus on large-scale system outages that hit the platform in March 2020 as well as the options trading procedures at the heart of a lawsuit filed by the family of a 20-year-old Robinhood trader who died by suicide last year.

Here’s what we learned from Thursday’s filing:

  • The company plans to raise $100 million when it begins trading on the Nasdaq. Robinhood is setting aside as much as 35% of its Class A shares for individual investors on its own platform — a much larger allocation for retail investors than in a typical IPO.
  • The company revealed that it manages more than $80 billion for some 18 million users on its platform, more than half of which are first-time brokerage accounts.
  • It’s actually profitable!
  • Robinhood grew sales to $958.8 million last year, up 245% from the prior year. It turned a $7.5 million profit last year, a significant improvement from a $106.6 million loss in 2019.
  • Its ticker symbol: HOOD.
  • The company also revealed it reached a settlement out of court with the family of Alexander Kearns, the 20-year-old who died by suicide last year after seeing a huge negative balance on his Robinhood account.

THE TAKEAWAY

The less-than-a-decade-old startup is surprisingly profitable and has a huge customer base. It’s already proven its ability to disrupt the brokerage industry — that “no fee” trading model forced virtually every other online brokerage to drop their fees, and the app broke down barriers for millions of non-professional investors to access the stock market.

Now, Robinhood’s got to prove its credibility.

As a publicly traded company, it’ll be much harder to get away with the outages and errors that have plagued the app in the past. It’s one thing for Robinhood customers to lose money by missing out on trades — it’ll be quite another for its shareholders to lose money because Robinhood can’t get its act together.