Cryptocurrency trade FTX is reportedly contemplating an acquisition of the buying and selling platform Robinhood, in keeping with a report from Bloomberg. Sources near the scenario instructed Bloomberg that FTX is nonetheless weighing the likelihood and hasn’t but made a suggestion.
When requested concerning the doable buyout, FTX CEO Sam Bankman-Fried said that the corporate at the moment isn’t within the technique of attempting to accumulate Robinhood. “We are excited about Robinhood’s business prospects and potential ways we could partner with them,” Bankman-Fried mentioned in a press release to Bloomberg. “That being said, there are no active M&A [mergers and acquisitions] conversations with Robinhood.” The Verge reached out to FTX with a request for remark however didn’t instantly hear again. Robinhood declined to touch upon the story.
In May, Bankman-Fried disclosed his 7.6 % stake in Robinhood, which was price about $648 million on the time, in keeping with a 13D Securities and Exchange Commission submitting. This sort of submitting is used when somebody acquires greater than 5 % of an organization however may additionally sign a possible takeover. Robinhood CEO Vlad Tenev and CCO Baiju Bhatt each personal about 8 % of the corporate and, as Bloomberg notes, management over 50 % of the corporate’s voting energy. Robinhood shares climbed 12 % following information concerning the potential acquisition.
As cryptocurrencies — and shares basically — take a tumble as we enter what some contemplate a “crypto winter,” Bankman-Fried and his FTX trade have been pivotal in offering bailouts to struggling blockchain firms. FTX prolonged $250 million in revolving credit score to crypto buying and selling platform BlockFi, and Bankman-Fried’s Alameda Research has additionally lent $500 million to crypto brokerage Voyager Digital.
Widespread financial uncertainty has affected Robinhood’s enterprise as effectively — in its most up-to-date earnings report, its month-to-month lively customers dipped 10 % to fifteen.9 million in March 2022, in comparison with 17.7 million in March 2021. Its income additionally fell 48 % yr over yr, from $522 million to $299 million.
Robinhood has develop into a preferred buying and selling platform amongst younger buyers due to its commission-free trades, in addition to the supply of each conventional shares and crypto-based investments. It has been working to broaden its crypto choices since first rolling out the choice in 2018 and launched its personal cryptocurrency pockets earlier this month. The firm went public final yr after driving out the meme inventory wave that despatched AMC and GameStop shares hovering. According to Bloomberg, Robinhood has misplaced about three-quarters of its market valuation since then, which at the moment sits at $7.4 billion.
