The FTX cryptocurrency exchange is reportedly considering acquiring the Robinhood trading platform, according to a Bloomberg report. Sources close to the situation told Bloomberg that FTX is still considering the possibility and has not yet made an offer.
When asked about a possible buyout, FTX CEO Sam Bankman-Fried said the company is not currently in the process of trying to acquire Robinhood. “We are excited about Robinhood’s business prospects and the potential ways we can partner with them,” Bankman-Fried told Bloomberg. “Given that there are no active M&As [mergers and acquisitions] talks to Robinhood. “The Verge asked FTX for comment, but did not receive an immediate response. Robinhood declined to comment on the story.
In May, Bankman-Fried revealed its 7.6 percent stake in Robinhood, which at the time was worth about $ 648 million, according to 13D Securities and Exchange Commission documentation. This type of filing is used when someone acquires more than 5 percent of a company, but it can also signal a potential takeover. Robinhood CEO Vlad Tenev and CCO Baiju Bhat own about 8% of the company and, as Bloomberg notes, control more than 50% of the company’s voting rights. Shares of Robinhood rose 12% after news of a potential acquisition.
Bankman-Fried is key in providing bailouts to struggling blockchain companies
As cryptocurrencies – and stocks in general – collapse as we enter what some see as a “crypto winter,” Bankman-Fried and its FTX exchange are key to providing bailouts to struggling blockchain companies. FTX provided $ 250 million in revolving credit to the crypto trading platform BlockFi, and Bankman-Fried’s Alameda Research also lent $ 500 million to crypto brokerage firm Voyager Digital.
Widespread economic uncertainty has also affected Robinhood’s business – in its latest revenue statement, its monthly active users fell 10 percent to 15.9 million in March 2022, from 17.7 million in March 2021. Revenue it also fell 48 percent year-over-year from $ 522 million to $ 299 million.
Robinhood has become a popular trading platform among young investors thanks to its no-commission deals, as well as the availability of both traditional stocks and crypto-based investments. He has been working to expand his crypto offerings since the first release of the option in 2018 and launched his own cryptocurrency portfolio earlier this month. The company went public last year after dealing with a wave of shares of memes that led to a rise in shares of AMC and GameStop. According to Bloomberg, Robinhood has since lost about three-quarters of its market value, which currently stands at $ 7.4 billion.
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