Robinhood CEO Vlad Tenev could be worth $2.5 billion after IPO

Vlad Tenev attends the 2020 Breakthrough Prize Ceremony at NASA Ames Study Center on November 03, 2019 in Mountain Leer, California.

Taylor Hill | Getty Photos

Robinhood CEO and co-founder Vlad Tenev might well perchance devour a paper fortune of over $2.5 billion when the corporate starts trading, in response to an SEC submitting. However his genuine payday will be within the years after, when he might well perchance make one other $4.7 billion in inventory compensation.

Robinhood is soliciting for a market price of as a lot as $35 billion in its upcoming preliminary public providing, with a half tag of between $38 to $42 a half. The providing marks the final public coronation of the controversial investing platform that made “democratizing finance for all” its mission. But Robinhood’s millions of small investors devour also created tall fortunes for its founders.

Tenev, 34, and co-founder Baiju Bhatt, 36, will every sell shares value about $50 million within the providing, in response to the SEC submitting on Monday. After the providing, they might well every maintain about 8% of the corporate’s inventory, and together they might well maintain about two-thirds of the balloting shares.

In step with the estimate of $38 to $42 a half, Tenev and Bhatt might well perchance devour every inventory value inventory value between $2.5 billion and $2.8 billion after the providing.

Tenev and Bhatt might well perchance make billions more within the approaching years thanks to a gracious compensation bundle. In Could, Robinhood’s board approved an incentive thought that might well perchance award Tenev as a lot as 22.2 million restricted inventory objects over the next eight years if the inventory hits particular targets. Bhatt would receive 13.2 million shares beneath the thought.

If Robinhood inventory hits the inventory targets — which open at $120 and upward push to $300 — Tenev would rep inventory valued at about $4.7 billion. Bhatt’s shares might well perchance be value about $2.8 billion.

Their massive liquidity match comes eight years after Tenev and Bhatt — who met as physics students at Stanford in 2005 — founded Robinhood with the scheme of attracting small, retail investors. Starting with an invite-handiest replace mannequin, Robinhood has exploded, with 22.5 million funded accounts as of the new submitting.

But Tenev will likely be personally embroiled in company’s broader controversies. The SEC submitting states that Tenev has obtained “requests for records and in some cases subpoenas” stemming from the sweeping investigations into the corporate’s trading restrictions in early 2021. In January, Robinhood restricted the have interaction of GameStop, AMC and diversified “meme” shares resulting from what it said changed into as soon as an absence of liquidity to conform with trading guidelines.

The restrictions led to a wave of sophistication-circulation lawsuits and criticism from many of its traders. In step with the SEC submitting, a search warrant changed into as soon as completed by the U.S. Legal skilled’s Place of work to “make Mr. Tenev’s cell phone.”

The company states within the submitting that, “We are cooperating with these investigations and examinations,” and that, “As a result of very preliminary nature of all of these lawsuits, we are unable at the present to estimate the likelihood or magnitude of any seemingly losses linked to those matters.”