diego_cervo /Getty Images While Robinhood is not the first with such an offering and this feature, IPO Access, has reportedly been in the works for sometime, it was formally launched on Thursday. For now, only randomly selected Robinhood customers will have access to the new offering. But the company said it is working to roll it out to all its customers as quickly as possible. Buying IPO shares won’t require any account minimums. Getting in on the ground floor of a hot new company through its IPO is harder for retail investors as brokers and underwriters typically prefer allocation to institutional and wealthy clients. Individual investors usually have to wait to buy shares on public exchanges, where prices often surge as soon as the first trades are made. (Shares can also tank after an IPO.) Now Robinhood—best known for attracting a new young crowd to investing with its commission-free app—is partnering with investment banks to offer some of these shares to ordinary investors. The investment banks will allocate IPO shares of certain participating companies to Robinhood. These shares will then be available to Robinhood customers with IPO access, who can submit their request for shares on the app after the investment banks have set the initial IPO price. When the final IPO price is determined, Robinhood users have an option to review, edit, or cancel their request. Because Robinhood receives only a limited number of IPO shares, it said its customers may receive all, some or none of their request, but it said “all Robinhood customers get an equal shot at shares regardless of order size or account value.” Robinhood competitor SoFi, which launched IPO investing in March, offers IPO shares to its customers who have at least $3,000 in SoFi accounts. Instead of partnering with investment banks, SoFi CEO Anthony Noto told CNBC, the firm allocates shares as an underwriter of the IPO. Medical scrubs company Figs will be the first company to offer IPO shares to Robinhood customers. Figs said in its IPO filing on Thursday that it expected up to 1% of its Class A common stock to be offered to retail investors through Robinhood. It is unclear if Robinhood plans to offer its users a piece of its own IPO, which it filed for in March with the Securities and Exchange Commission.
