This week’s preliminary public providing of Robinhood Markets Inc., dad or mum of the wildly standard buying and selling app, isn’t simply one of the talked-about IPOs of 2021. It’s the newest in a protracted collection of pitches to on a regular basis traders: Share in your dealer’s wealth by shopping for shares in your dealer.
In uncommon instances, such pitches have paid off huge time. Extra typically, you’d have performed your self a favor by taking roughly half your cash and lighting it on hearth as an alternative.
Simply as Robinhood isn’t the primary brokerage to supply commission-free buying and selling, it isn’t the primary to hunt to “democratize” investing or to promote a chunk of itself to its personal prospects.
On June 23, 1971, Merrill Lynch, Pierce, Fenner & Smith Inc. grew to become the primary New York Inventory Trade agency catering to particular person traders to supply its shares to the general public.
Thirsty for recent capital in a struggling inventory market, Merrill flogged its shares to its personal prospects, tapping the agency’s “superior recognition amongst that huge phase of the inhabitants,” reported The Wall Avenue Journal the subsequent day. “Primarily small traders, the kind lengthy championed by Merrill Lynch, shortly bought the whole quantity.”