Is Bankman-Fried’s Crypto Exchange FTX Exploring Robinhood Takeover

Sam Bankman-Fried’s FTX cryptocurrency exchange is investigating the possibility of acquiring American financial services provider Robinhood Markets Inc., according to persons familiar with the situation. Another source has revealed that FTX has not made a formal acquisition offer to Robinhood.

No final decision has been taken on the possible the app-based brokerage’s takeover, and FTX may decide not to pursue a deal, Bloomberg stated citing sources familiar with the matter.

Last month, Bankman-Fried disclosed a 7.6% ownership in Robinhood but stated that he has no plans to acquire control of the retail trading site. In a regulatory filing, Bankman-Fried stated that he has no intention of acquiring control of Robinhood. Robinhood’s dual-class shares currently give the company’s founders ownership of 64% of the voting shares outstanding.

Bankman-Fried had apparently not told Robinhood of any plans to merge it with his FTX platform. The billionaire stated in the filing that his viewpoint may change and that he may end up advocating for reforms. He revealed that he began investing in Robinhood in the middle of March.

According to a Securities and Exchange Commission report, the investor currently controls more than 56 million shares worth more than $648 million. Robinhood, which was at the center of the meme-stock scandal last year when it restricted access to specific client accounts, announced that revenue for the March quarter will fall below $340 million, citing reduced equities and crypto trading volumes.

The app-based brokerage recorded a net loss of $392 million on revenues of $299 million in the three months ending in March, with compensation expenses eating into its bottom line and monthly active customers down 10% from the three months ended in December.

On news that the FTX crypto exchange is looking into acquiring the trading app Robinhood Markets stock jumped 16%. The stock had already risen by 21% before being suspended due to volatility following the revelation. Robinhood shares were trading strongly higher for much of the Monday session after Goldman Sachs analysts upgraded the company’s rating to “neutral” from “sell.”

 



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