Sam Bankman-Fried, the billionaire founder of cryptocurrency exchange FTX, has announced a 7.6% stake in struggling retail brokerage Robinhood, calling it an “attractive investment.”
Bankman-Fried said in a securities filing that he “has no intention of taking any action to change or affect control.” [Robinhood]“ and bought the share purely as an investment. However, he left open the possibility of asking the company to consider “strategic alternatives or operational or managerial initiatives.”
Robinhood shares rose as much as 32 percent in after-hours trading following the announcement.
Bankman-Fried bought $648 million worth of Robinhood stock at an average price of $11.52. The purchases disclosed by Bankman-Fried began in mid-March and continued through Wednesday, when he bought $27.5 million worth of stock, according to a regulatory filing.
Robinhood went public in July with a much-anticipated debut. But brokerage stocks have faltered as retail client enthusiasm for stock trading has waned in recent months. The broker’s shares had since fallen more than 70 percent ahead of Thursday’s release.
Robinhood has made major moves into cryptocurrencies as revenue from stock trading has fallen, launched crypto wallets on its platform and added new currencies, bringing it more in line with competitors like Coinbase. It plans to expand internationally as a crypto brokerage.
Bankman-Fried previously spoke about the strength of the broker’s brand: “Robinhood hardly needs to advertise; her name conveys her brand and message without added color,” he wrote on Twitter.
Source: Crypto News Austria