Robinhood to buyback $578 M Sam Bankman-Fried’s stake: Board 

• SBF and Gary Wang bought a stake in Robinhood via Emergent Fidelity. 
• BlockFi asked the court, claiming the shares as FTX used them as collateral for a loan. 
• FTX filed for chapter 11 bankruptcy, while Emergent Fidelity filed for bankruptcy protection on February 3, 2023. 

The FTX-saga created some weird situations in the market. The contagion effect affected many players. Recently, the financial services company Robinhood’s board of directors approved buying back the stake worth $578 million. Ex-CEO Sam Bankman-Fried and ex-CTO Gary Wang bought it last year. The co-founders of the now bankrupt crypto exchange.  

The Confirmation in the Q4 Report

Robinhood released its fourth quarter report on February 8, 2023. It confirms the approval from the board for buying back the stake. Company’s CFO Jason Warnick said:

“Our Board authorized us to pursue purchasing most or all of our shares that Emergent Fidelity Technologies bought in May 2022. The proposed share purchase underscores the confidence the Board of Directors and management team have in our business.”

The co-founders of FTX purchased 55 million shares in Robinhood stock, which are worth $578 million at the current price. The deal occurred in May 2022 via Emergent Fidelity Technologies, which directly took loans from Alameda Research, FTX’s sister firm. The United States Depart of Justice (DoJ) had already seized the 55 million shares, which are about 7% of the company as of January 9, 2023. The act was in the wake of an ongoing bankruptcy case and other allegations of wire fraud and conspiracy against FTX. 

The ambiguity of Seized Assets

Court seized the assets due to a filing from BlockFi, a crypto lending platform, for reclamation of the shares. SBF and Gary Wang had used Robinhood shares as collateral to take a loan from BlockFi. 

Speaking with the media on February 8, 2023, Warnick said that Robinhood is closely working with the DoJ to devise a plan to facilitate the buyback. Still, nothing has been finalized in the matter to date. At the same time, the shares have another dispute under the belt. FTX collapsed in November, and on December 23, 2022, they requested the court to stop BlockFi from claiming the shares. Although the buyer Emergent Fidelity did not file for chapter 11 bankruptcy along with FTX, they had filed for bankruptcy protection on February 3, 2023. 

Robinhood Q4 crypto revenue

The revenue from their “Robinhood Web3 Wallet” fell by 24%, down to 439 million in Q4 versus Q3. At the same time, the third quarter revenue fell 12% concerning the second quarter. At the same time, the overall net revenue gained 5% to be at $380 million in Q4, with the firm reporting an overall net loss of over $1 billion in 2022. 

Even though, over the quarter, the company managed to reach out with their Robinhood Web3 Wallet to more than 1 million waitlisted users, revenue dropped nonetheless. At the time of writing, the stock was trading at $10.47 with a slight drop of 0.76%, the market cap was at $8.75 billion, and the volume was 12.22 million shares.

Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

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