The Robinhood Markets, Inc. logo is seen at a pop-up event on Wall Street after the company’s IPO in New York, USA, July 29, 2021. REUTERS / Andrew Kelly
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June 27 (Reuters) – Sam Bankman-Fried’s FTX cryptocurrency exchange says it is not in talks to acquire Robinhood Markets Inc (HOOD.O) after a report Monday claimed the exchange was investigating a similar deal.
Bloomberg News reported on Monday that FTX is discussing internally how to buy the app-based brokerage and that Robinhood has not received a formal takeover approach, citing people familiar with the matter.
“There are no active merger and acquisition talks with Robinhood,” Bankman-Fried said in an email statement. “We are excited about Robinhood’s business prospects and the potential ways we can partner with them.”
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Robinhood declined to comment. Shares of the retail platform fell 5% in expanded trading after jumping more than 14% compared to the report.
Last month, FTX’s founder and CEO revealed a 7.6% stake in Robinhood, but said he had no intention of taking control of the retail platform.
Robinhood’s two-class stock gives its founders control of 64% of the voting stock, making it virtually impossible to take over without their support. Read more
The popular trading platform came under pressure this year as trading volumes declined from the frantic pace of 2021 – when retail investors used it to pump money into stocks of so-called memes like GameStop (GME.N) and AMC Entertainment (AMC.N)).
This slowdown, along with the sell-off of high-tech technology stocks, led to a nearly 50% drop in Robinhood shares this year. The company had a market valuation of nearly $ 7 billion at Friday’s closing price.
The US division of FTX announced in May that it would launch a stock trading platform by the end of the summer. Last week, it acquired an undisclosed partner, Embedded Financial Technologies, which will add custody, execution and clearing services to its stock trading platform.
FTX and its billionaire founder Bankman-Fried rescued other players during the recent collapse of the crypto market. He provided the crypto lender BlockFi with a revolving $ 250 million loan to help the company avoid a liquidity crunch.
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Report by Mania Saini in Bengaluru, John McCrank and Crystal Hu in New York; Edited by Aditya Soni and Richard Chang
Our standards: Thomson Reuters’ principles of trust.
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