Robinhood Markets shares surged 33% in after-hours trading on Thursday after a regulatory filing said cryptoexchange head Sam Bankman-Fried has taken a 7.6% stake in the digital brokerage.
The transaction was made through Emergent Fidelity Technologies, which Bankman-Fried owns the majority. He is also the co-founder and CEO of FTX Trading, a crypto exchange.
The filing said the purchase price was $648 million, and the transaction was made because Robinhood (ticker: HOOD) stock was an “attractive investment.” The intent is to hold the shares as an investment and not take any action to change or influence control of Robinhood, the filing added.
Robinhood stock hit a 52-week low on Thursday and have more than halved this year. The company was one of last summer’s most anticipated initial public offerings but the shares are down more than 70% since then and retail enthusiasm for trading has taped off in recent months.
Bankman-Fried could ultimately review options for enhancing shareholder value or even acquire more shares, the filing said.
FTX is among the largest crypto exchanges and a competitor for Coinbase (COIN) and Binance.
Robinhood, perhaps best-known as the go-to brokerage app for retail investors who follow the meme stock trade, has been building its crypto trading operations, which it introduced in 2018.
In April, Robinhood said two million people on a waitlist for a crypto wallet had access to send and receive cryptocurrencies available on Robinhood. The wallets aren’t yet available in Hawaii, Nevada or New York, it added.
Write to Liz Moyer at [email protected]
Credit: www.marketwatch.com /