Robinhood Advocates for a Larger Share for Retail Investors in Anthropic IPO

Robinhood's CFO Shiv Verma wants retail investors to receive a larger share of stocks during initial public offerings and stated that the broker will participate in Anthropic's IPO. However, Robinhood does not set the allocation; it is determined by issuers and their banks. This allocation affects how many clients receive shares at the offering price rather than on the open market.

What is known about Anthropic

According to Bloomberg, Anthropic informed investors that revenue for the III quarter reached $16.8 billion – nearly 12 times more than a year earlier. An amended statement to the U.S. Securities and Exchange Commission (SEC) indicated approximately $895 billion in planned expenses. Robinhood is competing with other retail brokers for access to this offering and future listings. Some investors are waiting for Anthropic's valuation at the IPO before investing in OpenAI, which has lowered its funding target by $10 billion.

How much retail receives

In an interview with Bloomberg Businessweek Daily on Monday, Verma said that historically retail investors received only 1–5% of offerings, and now companies are asking if they can allocate 10% or 20%. Supporting larger quotas, he cited approximately 25% of retail presence in the stock market. SpaceX, he noted, wanted 15–20% for retail. During its own IPO in 2021, Robinhood allocated 20–35% of shares to clients, Axios reported.

Verma says that Robinhood conveys client demand to issuers and banks and advocates for retail interests: "We make sure companies know that the retail investor is here." Robinhood cannot take orders before the offering opens, and the quiet period before the offering limits what he can disclose. Instead, Verma pointed to client activity: people are depositing more funds and trading more actively, which he called a good sign.

The downside

Larger quotas also carry risk. SpaceX's drop after its IPO took away 20% from its peak within a week after the June offering. If issuers continue to increase retail quotas, brokers may gain influence that was previously mostly held by banks, but weak post-offering returns could weaken this argument.