FTX’s Sam Bankman-Fried Acquires a 7.6% Stake in Robinhood

Sam Bankman-Fried (SBF), the CEO of FTX, has recently become one of the largest shareholders in the popular American trading platform, Robinhood, after taking a 7.6% stake in the company. 

According to a Thursday filing with the U.S. Securities and Exchange Commission (SEC), Bankman-Fried purchased 56 million shares of HOOD through a company called Emergent Fidelity Technologies Ltd., which is solely owned by SBF.

SBF paid $648 million for the acquisition. However, the value of the shares was nearly worth $482 million at market close.

Per the 13D filing, SBF acquired the shares as “an attractive investment.” The filing reads,

“The Reporting Persons acquired the Shares in the belief that the Shares represent an attractive investment. The Reporting Persons intend to hold the Shares as an investment, and do not currently have any intention of taking any action toward changing or influencing the control of the Issuer.”

The filing, however, pointed out that SBF “may from time to time engage in discussions as a stockholder” with the management.

Robinhood Shares Jump 30%

Following the news of SBF’s acquisition, shares of HOOD rallied more than 30% in after-market trading, according to NASDAQ data.

This comes as a huge relief to HOOD holders, considering that the stock hit a new all-time low (ATL) of $7.7 earlier on Thursday. Robinhood’s crypto revenue also slumped by 39% year-on-year (YoY) in the first quarter of 2022. From $88 million in Q1 2021 to $54 million in Q1 2022.

Commending on the acquisition, Robinhood’s communications team said in a tweet thread,

“We’re doubling down on creating a multi-generational company where customers can build wealth for their generations. Of course, we think it is an attractive investment too.  We have the best customer base, are introducing great new products, and we have the team to deliver.”

Earlier in April, Robinhood announced that it had signed an agreement to acquire the UK-based crypto firm, Ziglu. The acquisition was aimed at expanding its services to the UK market.