Robinhood shares pop more than 30% after Sam Bankman-Fried buys 7.6% stake

Robinhood shares pop more than 30% after Sam Bankman-Fried buys 7.6% stake

Sam Bankman-Fried, CEO of FTX US Derivatives, testifies at the House Agriculture Committee hearing titled Changing Market Roles: The FTX Proposal and Trends in New Clearinghouse Models, at Longworth Building on Thursday, May 12, 2022.

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Sam Bankman-Fried, the CEO of crypto exchange FTX, has taken a 7.6% stake in Robinhood, according to a Thursday filing with the Securities and Exchange Commission.

Shares of the investing company jumped 36% at one point in extended trading before falling back. They were last up about 26%.

In regular trading on Thursday, the stock hit an all-time low. Robinhood ended the session at a price of $8.56, about 77% off its IPO price last July.

According to the document, Emergent Fidelity Technologies has taken a $648 million stake in Robinhood. Bankman-Fried is the sole director and majority owner, he says.

The document goes on to say that Bankman-Fried acquired the shares in the belief that they “represent an attractive investment.” “The reporting persons intend to hold the shares as an investment and currently have no intention of taking any action to change or influence the control of the issuer,” it says. Although the filing also says he may “from time to time engage in discussions” with management.

Bankman-Fried currently has no intention of taking any further action, but at some point, if circumstances change, it may consider “options to enhance shareholder value through, among other things, various strategic alternatives or to operational or management initiatives,” according to the document. He also says he could acquire additional shares.

FTX, of which Bankman-Fried is the CEO, is one of the largest crypto exchanges in the world and offers derivatives products for more sophisticated traders as well as spot trading. FTX has become a rival of Coinbase and Binance, although it does not offer its services in the United States

Robinhood got its start by allowing retail investors to invest in stocks, but had huge success when it rolled out its crypto trading platform in 2018. Crypto trading has since become important to the results of the business. In the fall, Robinhood revealed that it was testing a crypto wallet and said the waiting list had surpassed one million customers.

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