Sam Bankman-Fried, the billionaire founder and CEO of cryptocurrency exchange FTX, has acquired a sizeable 7.6% stake in large online broker Robinhood..
The news was welcomed by the market, with Robinhood’s share price initially soaring more than 30% in after-hours trading.. At the time of writing, the price has stabilized with an overall gain of 24%.
According to a securities filing made Thursday with the US Securities and Exchange Commission (SEC), Bankman-Fried purchased a total of $648 million worth of Robinhood stock at an average price of $11.52. The purchases revealed by Bankman-Fried would have started in mid-March and continued until Wednesday.
In the filing, Bankman-Fried made it clear that he had “no intention of taking any action to change or influence the control of [Robinhood]”and that the move was simply because he viewed Robinhood as an “attractive investment.”
Robinhood’s communications team took to Twitter to emulate what Bankman-Fried said in his securities presentation: tweeted to his 82,000 followers “Of course we also think it’s an attractive investment.”
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.
— Robinhood Comms (@RobinhoodComms) May 12, 2022
Of course we also think that it is an attractive investment. We have the best customer base, we are introducing great new products, and we have the team to deliver.
The transaction was executed by an Antiguan company called Emergent Fidelity Technologies Ltd, of which Bankman-fried is the sole director and majority owner..
The announcement appears to have provided Robinhood investors with some short-term relief, after its share price hit a new all-time low of $7.73 on March 12.just a day after the brokerage firm revealed that its cryptocurrency transaction revenue was down 39% year over year (YOY).
Robinhood has been making significant strides in the cryptocurrency market, even though revenue from stock-related trading has fallen sharply. Robinhood currently offers users the ability to trade cryptocurrenciesmaking it immediately competitive with other US-based crypto exchanges such as Coinbase and Gemini.
According to Robinhood’s Q1 2022 report, approximately 18% of its Q1 net income came from crypto-related transactions.. However, revenue based on cryptocurrency transactions was down 39% year-on-year at $54 million, compared to $88 million in the first quarter of 2021.
In April of last year, Robinhood announced plans to expand into its crypto brokerage by purchasing UK-based crypto firm Ziglu..
Earlier this month, Robinhood also launched its long-awaited cryptocurrency wallet. before the two million users who were on the waiting list, outlined plans to integrate the Lightning Network and listed Shiba Inu (SHIB) after months of campaigning by supporters.
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