Robinhood shares up over 30% after FTX CEO buys 7.6% stake

    16 May 2022
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    Robinhood Markets shares surged more than 30% after crypto billionaire Sam Bankman-Fried disclosed a 7.6% stake in the online brokerage. Bankman-Fried is the founder and CEO of cryptocurrency exchange FTX.

    On Thursday, Bankman-Fried acquired about 56.3 million shares in Robinhood Markets through his investment firm, Emergent Fidelity Technologies, according to a regulatory filing with the US SEC, CNN reported.

    That makes the 30-year-old’s stake worth about $482 million, based on Robinhood’s closing share price of $8.56. Bankman-Fried paid about $648.3 million for the shares, according to the SEC filing.

    Bankman-Fried is the founder and CEO of cryptocurrency exchange FTX. He has a net worth of $11 billion, per the Bloomberg Billionaires Index.

    “Of course, we think it is an attractive investment too,” Robinhood’s communications team said in a tweet Thursday evening in response to the news of the investment.

    California-based Robinhood was founded in 2013 but was thrust into the limelight last year on the back of a meme-stock craze. It had 22.7 million users at the end of 2021 — an on-year increase of 81%, the company said at its full-year results announcement in January.

    The no-commission trading platform lost $3.7 billion in 2021. Its stock, which debuted at $38 a share in July 2021, is down over 70% since its IPO. Revenue fell 43% in the first quarter of 2022 from a year ago as trading activity fell, the company disclosed in April. It has flagged crypto as a growth area.

    Shares of the investing company jumped 36% at one point in extended trading before pulling back. They were last up about 25%. In regular trading Thursday the stock hit an all-time low. Robinhood ended the session priced at $8.56, about 77% away from its IPO price last July.

    Meanwhile, shares of Coinbase, which plunged last week following a lousy earnings report and weak outlook, rallied in tandem with Robinhood on Friday. Coinbase stock was up about 30%. But its shares are still down 30% this week and more than 70% this year.

    Image Source: https://cryptoadventure.com/sam-bankman-fried-offers-new-years-resolutions-for-crypto-industry/

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