Robinhood shares surge more than 30% after Sam Bankman-Fried bought 7.6% stake

Robinhood shares surge more than 30% after Sam Bankman-Fried bought 7.6% stake

Sam Bankman-Fried, CEO of FTX US Derivatives, will testify during the House Agriculture Committee hearing entitled Changing Market Roles: The FTX Proposal and Trends in New Clearinghouse Models on Thursday, May 12, 2022 at the Longworth Building.

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Sam Bankman-Fried, the CEO of crypto exchange FTX, has acquired a 7.6% stake in Robinhood, according to a filing with the Securities and Exchange Commission on Thursday.

Shares of the investing company rose 36% at one point in extended trading before retreating. They were last up about 26%.

In regular trading on Thursday, the stock hit an all-time low. Robinhood ended the session at $8.56, about 77% off its IPO price from last July.

According to the document, Emergent Fidelity Technologies took a $648 million stake in Robinhood. Bankman-Fried is the sole director and majority owner, it says.

The document goes on to say that Bankman-Fried bought the shares in the belief that they “represent an attractive investment.” “The reporting persons intend to hold the shares as an investment and do not currently intend to take any action to change or affect control of the issuer,” it said. However, the filing also states that he “may have discussions with management from time to time.”

Bankman-Fried has no intention of taking any other action at this time, but at some point, as circumstances change, he will review “options to enhance shareholder value, including through various strategic alternatives or operational or managerial initiatives,” according to the document. It also says he could buy more shares.

FTX, where Bankman-Fried is CEO, is one of the largest crypto exchanges in the world and offers derivatives products for more sophisticated traders as well as spot trading. FTX has become a rival to Coinbase and Binance, although it does not offer its services in the US

Robinhood started out by offering retail investors the opportunity to invest in stocks, but saw great success when it launched its crypto trading platform in 2018. Since then, crypto trading has become important to the company’s bottom line. In the fall, Robinhood revealed it was testing a crypto wallet and said the waiting list for it had surpassed 1 million customers.

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