Crypto Exchange FTX Is Reportedly Considering Buying Robinhood

Cryptocurrency exchange FTX is reportedly considering the acquisition of trading platform Robinhood, according to a report by bloomberg, Sources close to the situation told bloomberg That FTX is still weighing the possibility and hasn’t made an offer yet.

When asked about the potential buyout, FTX CEO Sam Bankman-Fried said the company is not currently trying to acquire Robinhood. “We are excited about Robinhood’s business prospects and the potential ways we can partner with them,” Bankman-Fried said in a statement. bloomberg, “That being said, there are no active M&A’s” [mergers and acquisitions] Conversation with Robinhood. , ledge FTX reached out with a request for comment but did not immediately hear back. Robinhood declined to comment on the story.

In May, Bankman-Fried disclosed his 7.6 percent stake in Robinhood, which was worth about $648 million at the time, according to a 13D Securities and Exchange Commission filing. This type of filing is used when an individual acquires more than 5 percent of the company, but can also indicate a potential takeover. Robinhood CEO Vlad Tenev and CCO Baiju Bhatt both own about 8 percent of the company and, as bloomberg Note, control over 50 percent of the company’s voting power. Robinhood shares climbed 12 percent following news about a potential acquisition.

As cryptocurrencies – and stocks in general – enter what some consider to be “crypto winter,” Bankman-Fried and his FTX exchange have been instrumental in providing bailouts to struggling blockchain companies. FTX extended $250 million in revolving credit to crypto trading platform BlockFi, and Bankman-Fried’s Alameda Research has also extended a $500 million loan to crypto brokerage Voyager Digital.

Macroeconomic uncertainty has hit Robinhood’s business as well — in its most recent earnings report, its monthly active users fell 10 percent to 15.9 million in March 2022, compared to 17.7 million in March 2022. Its revenue also fell 48 percent year over year. $522 million to $299 million.

Robinhood has become a popular trading platform among young investors due to its commission-free trades as well as the availability of both traditional stock and crypto-based investments. It has been working to expand its crypto offerings since first launching Options in 2018 and launched its own cryptocurrency wallet earlier this month. The company went public last year after riding the meme stock wave that accelerated AMC and GameStop shares. According to bloombergSince then, Robinhood has lost nearly three-quarters of its market valuation, which currently stands at $7.4 billion.

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