Robinhood Starts Its Retail Allocation for the App Traders Requesting to Participate in the IPO

While striving for a valuation of up to $35 billion, Robinhood Markets Inc, the Menlo Park, California-based online brokerage has started the allocation of shares for its app traders. At a range of $32 to $42 per share, the firm said that it is seeking to raise about $2.2 billion. Since its inception, Robinhood raised $5.60 billion in 24 investing rounds with 56 investors involved. The company's impressive growth is mostly due to the intuitive interface, zero commission, and cryptocurrency trading. With 18 million active retail traders, predominantly Gen Z and Millennials, with an overall client asset amount of $80 billion, Robinhood is trying to reshape how small-time traders invest in companies becoming public. As it advances toward its IPO and defying conventions, last Saturday, the startup hosted a live-stream roadshow presentation — with telepromptered answers. All of Robinhood's app customers received an email invitation to attend. Typically, this type of event is limited to institutional investors and hedge funds. The Silicon Valley startup that popularized commission-free trading is reserving 20% to 35% of its shares for traders of the app, an unusual move for a high-profile offering. The company is expected to start trading on the Nasdaq Stock Market on July 29, under the ticker HOOD. For users, the max share is at $50.40, which results after adding a 20% buffer on the highest price in the range. Users' orders remain valid if the final price of the IPO is within this 20% range. If the price moves outside the 20% buffer or is above the max share price, the trader will need to reconfirm its request – all of it through the app. CEO and Co-Founder, Vlad Tenev said during the live-streaming event, "We anticipate this will be one of the largest retail allocations ever." "At Robinhood, the rich don't get a better deal" is one of the company's mottos. Regarding its controversial revenue-making practice of "payment for order flow" (PFOF)— under which Robinhood receives fees from market makers like Citadel Securities for routing orders to them —, CFO Jason Warnick, said, "If a ban or other limitations on it were to be imposed, we believe Robinhood and the industry would adapt and explore other revenue sources." Beyond the fees by routing its users’ orders — about 81% of its revenue; Robinhood receives an average of 2.5 cents for every $100 traded —, another source is Robinhood Gold membership, which gives clients access to investment tools and margin loans for $5 per month. There is also stock and cash interest. The business model of PFOF is being scrutinized by the SEC amid concerns that it creates a conflict of interest because retail traders aren’t getting the best trading execution available. Another announcement during the webcast is that Robinhood Markets Inc is considering launching U.S. retirement accounts, like IRAs and Roth IRAs, which would allow Robinhood to tap a gigantic market. Currently, there are $12.6 trillion in IRAs. Investment Retirement Accounts attract long-term investment, setting tax penalties when withdrawing money. "We are interested in building more account types, including IRAs and Roth IRAs, we've been hearing that a lot from our customers. We want to make first-time investors into long-term investors," Tenev said. Robinhood was founded in 2013 by Vlad Tenev and Baiju Bhatt, at that time roommates at Stanford University. They will hold two-thirds of the voting power after the IPO, as the prospectus showed. Some experts have warned about Robinhood's revenue models, regulatory practices, and exaggerated valuation based on a price/sales ratio of 26. Today, Robinhood is the third-largest brokerage firm based on the number of funded accounts, right behind Fidelity and Charles Schwab (which purchased TD Ameritrade in 2020). However, its CEO is not licensed by FINRA as a registered investment advisor. This is the Q&A at the roadshow virtual session.   • IBL News, July 3: Trading App Robinhood Files Its IPO, Targeting a Valuation of $40B

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Flooded With Cash and the Open edX Software, MIT and Harvard Start to Shape their New Non-Profit Venture

The new, yet-unnamed, educational nonprofit that MIT and Harvard will govern together and will continue to own, advance, and enhance Open edX, MIT said yesterday. It's expected to be a very different venture from the existing edX Inc, which will be owned by purchaser 2U, becoming a subsidiary registered as a public benefit company. It will start with a whopping amount of $800 million in cash paid by 2U and the property of the Open edX software. "It will explore new ways to make online learning more effective, engaging, and personalized," said MIT. Once the transaction is completed, within the next four months, "the nonprofit will aim to do what edX could not: invest at the necessary scale to sustain Open edX as a fresh, vital, open-source learning platform for the world, and tackle the next great research challenges in online learning." "It could, for example, invest in the potential of artificial intelligence to make online learning more responsive and personalized to the individual learner." According to MIT’s President, L. Rafael Reif, the nonprofit mission, focus, agenda, aspirations, and research program will be developed following consultation with faculty of both MIT and Harvard. A non-disclosed part of those $800 million in proceeds that 2U paid for the edX brand, course catalog, business, and partners, will be used "to repay a recent line of credit from MIT and Harvard." MIT and Harvard revealed that over the years they contributed $80 million total ($40 million each) to edX. The two institutions said that "they will not recoup those funds from the sale." However, the influx of hundreds of millions of dollars will go to the new non-profit venture. The new venture will keep a non-defined number of employees of the existing edX. Others will work for 2U. The role of CEO Anant Agarwal is not clear yet. "He will have many options and opportunities to consider, including potentially with the public benefit company edX or the nonprofit MIT and Harvard will govern," MIT said. MITx Online Will Use the Open edX Software On the other hand, MIT Open Learning will develop a new world-facing platform called MITx Online, which will host only the institute’s MOOCs. It will not aggregate content generated by other universities. MITx Online will use the Open edX software. OpenCourseWare and the Open Learning Library will continue working. 2U's "Marketing Advantages" In the meantime, publicly-traded 2U elaborated on the marketing advantages that it will achieve. Through a set of slides [PDF download], 2U executives told investors and reporters that the deal will harness the "marketing engine" of their company with the well-known brand and course marketplace of edX, especially in terms of client acquisition’s cost. 2U predicts it could convert 0.03% of edX’s users into paying customers. This would lower its marketing costs by $4,000 per enrollment and save 2U $40 to $60 million annually.   [Disclosure: IBL Education, the parent company of the IBL News service, uses Open edX software on its platform, and provides custom ecosystems to organizations mentioned in this report and other firms.]   • IBL News, June 29, 2021: 2U Buys MIT’s and Harvard’s edX Platform for $800M; Open edX Software Kept as Non-Profit

2U Buys MIT's and Harvard's edX Platform for $800M; Open edX Software Kept as Non-Profit

In a surprising deal, 2U Inc. (Nasdaq: TWOU) announced yesterday that it will purchase edX Inc. — a nonprofit founded by MIT and Harvard University — for $800 million in cash. With the transaction, Online Program Manager (OPM) 2U will acquire all edX assets, including the brand, the website with 50 million learners, a marketplace with 230 university and corporate partners, and 3,500 digital programs. The $800 million proceeds will flow to a new, still unnamed nonprofit led by Harvard and MIT that "will collaborate with educational institutions, governments, and other organizations to develop and evaluate new approaches to learning and pedagogy." This non-profit will maintain the open-source platform Open edX, according to the press statement. 2U stated that it plans to operate edX under its umbrella "as a public benefit entity, a class of purpose-driven organizations that balances the interests of shareholders with other stakeholders." It means that the new edX will operate as a for-profit company, as MIT confirmed. The Lanham, Maryland – based company said that "it has also committed to continuing to fulfill the edX mission by, among other things, guaranteeing affordability through the continuation of a free track to audit courses." In addition, 2U ensured that it will contribute "to the ongoing development of the fully open-source and independent platform Open edX." 2U and edX described the deal as "an industry-redefining combination that will help power the digital transformation of higher education, expand access and affordability, and usher in a new era of online learning." A themed, PR website called Transformingdigitaleducation.com was specifically created to announce the transaction. With over 80 top universities as customers, 2U said was expecting "to approach $1 billion in yearly revenue by the end of 2021." In 2020, edX revenues were 84.6 million, and its operating loss $17.4 million, according to public records. "By combining 2U and edX’s global reach and offerings from free to degree, together we believe we can fully realize our shared vision, meet the growing worldwide demand for online education, and deliver growth and long-term value to shareholders and other stakeholders," said 2U Co-Founder & CEO, Christopher “Chip” Paucek. "As edX looks to its next phase of growth and impact, joining forces with 2U marks a major milestone in our evolution," said Anant Agarwal, Founder, and CEO of edX and MIT Professor. "Today’s announcement will carry forward this mission on a whole new scale, connecting many more learners with a wider range of high-quality options for content, credentials and degrees. With online education rapidly changing, it’s the right moment for this leap of evolution for edX," said Harvard president Larry Bacow and MIT president Rafael Reif in a joint statement. "At the same time, the nonprofit that emerges from this transaction will enable us and our partners to support innovation that enhances learning for all and, we hope, play a catalytic role in closing the learning gap that exists for far too many." 2U said that it will contribute to supporting the Open edX platform, despite it will belong to MIT and Harvard's new non-profit company. "Following the closing, 2U expects to be a significant contributor of code to the Open edX platform, and the transaction is expected to increase the impact that Open edX can have in supporting learning outcomes around the world. Open edX currently powers approximately 2,400 learning sites worldwide." 2U’s people, technology, and scale will expand edX’s ability to deliver on our mission and enable all learners to unlock their potential. #freetodegree — anant agarwal (@agarwaledu) June 29, 2021 By combining 2U and edX’s global reach and offerings from free to degree, together we believe we can fully realize our shared vision and meet the growing worldwide demand for online education. #NoBackRow https://t.co/oSgwdxzVRJ pic.twitter.com/3P6hBoRbSx — Chip Paucek (@chippaucek) June 29, 2021 If I were an instructor of a course published in edX, via a university partnership with the non-profit corporation once known as a consortium, I would be furious—I bet instructors cannot ask their course to be taken down, too. https://t.co/NDEKunezc8 — Lorena Barba (@LorenaABarba) June 29, 2021 • MIT's view: MIT and Harvard agree to transfer edX to ed-tech firm 2U • Harvard's view: Harvard and MIT-led nonprofit to tackle longstanding inequities in education • MIT News: FAQs on agreement to sell edX to 2U, Inc. and fund nonprofit to reimagine digital learning Education-technology company 2U Inc., which runs graduate programs for dozens of top universities, is buying web-based course provider edX, a nonprofit founded by Harvard and MIT https://t.co/XQJsVbo5Ui — The Wall Street Journal (@WSJ) June 29, 2021

More Views on What 2U's Purchase of edX Will Mean for Higher Ed

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Coursera's Stock Price Drops Despite Analysts' Endorsement

Coursera (NYSE: COUR), which became public on March 31st, dropped on Wednesday the 5th almost 8%, despite receiving analysts' support regarding the first-quarter report. Investors still consider that the educational company is overvalued. On Thursday, the stock suffered another significant decline of 7.21%, until $38.98. The online learning platform announced a loss per share of 40 cents, compared to 45 cents a year earlier, with revenue of $88.4 million, versus $53.8 million for the same period in 2020, a growth of 64%. Net loss was $18.7 million or 21.1% of revenue, compared to $14.3 million or 26.6% of revenue a year ago. The company forecasted second-quarter revenue of $89 million to $93 million. In its initial public offering, Coursera (ticker: COUR) sold 15.73 million shares at $33 each. The stock has since rallied about 36%. On Wednesday, shares were down to $42. Josh Baer, from Morgan Stanley, wrote: "Coursera beat every estimate and metric we track in Q1, and we see positive estimate revisions ahead as the durability of growth and margin expansion is underestimated." Analyst Sarang Vora, from Telsey Advisory Group, said: "We believe Coursera’s consistent focus on growing its content catalog and member base, combined with enhancements to its technology platform, should continue to boost results in 2021 and beyond." Coursera's CEO Jeff Maggioncalda was optimistic: "We believe the digital transformation of higher education is only in the early innings, and we see many opportunities to drive growth for Coursera in the years ahead." "During the first quarter, we demonstrated our ability to scale all parts of our business with revenue growth of 64% year-on-year," said Ken Hahn, Coursera’s CFO. "Our freemium model allows us to acquire learners at a low cost and meet their lifelong learning needs with a growing selection of premium, job-relevant content, and credentials." Coursera disclosed other interesting data regarding its day-to-day operations: The company added 5 million new registered learners during the quarter for a total of 82 million. Enterprise revenue for the first quarter was $24.5 million, up 63% from a year ago. Paid Enterprise Customers increased 84% from a year ago to 479 businesses, governments, and campuses. Degrees revenue for the first quarter was $12.0 million, up 81% from a year ago as prior cohorts scale and students begin newly launched programs. The total number of Degrees Students reached 13,493, up 88% from a year ago.   • Coursera: Coursera Reports First Quarter Fiscal 2021 Financial Results

President Biden Proposes Two Years of Free Community College

President Biden announced on Wednesday a new $1.8 trillion plan — the American Families Plan — that would provide, among other things, two years of free community college for all Americans. There are over 950 community colleges in the U.S. A total of 30 states already cover tuition at community colleges or universities. The plan also would cover the tuition of low and middle-income students attending over 800 existing historically Black colleges and universities, tribal colleges, and other minority-serving institutions. Additionally, it would up the maximum Pell Grant for students in financial need by $1,400, bringing the award to $8,295 a year. These safety net programs would benefit institutions and students with the fewest financial resources. Altogether, the Biden Administration would spend $302 billion over 10 years as part of his American Families Plan: $109 billion for two-year colleges, $80 billion addition for Pell Grants, $62 billion for retention and completion efforts, $39 billion for two free years at minority-serving institutions for most students. The plan is less ambitious than Biden's campaign promise of making public four-year colleges tuition-free for many Americans and doubling the Pell grant. The American Council on Education said that the community college plan could "easily revolutionize access to higher education in the United States." Other reactions in higher education have been largely positive. However, the plan won't be easy to get through Congress, as it is likely to face opposition from the Republican Party.

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Saturday, November 22, 2025

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Saturday, November 22, 2025

AI is transforming the education technology landscape as more teachers adopt intelligent tools, driving forward and adaptive learning experiences.

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