Famed trading platform FTX CEO Sam Bankman-Fried has spent $648 million to acquire a 7.6% stake in Robinhood. The announcement, revealed in a U.S. Securities and Exchange Commission (SEC) filing, only mentions an “attractive investment,” but SBF isn’t ruling out making a contribution in the future.
Sam Bankman-Fried buys shares in Robinhood
The young billionaire CEO of the FTX platform, Sam Bankman-Fried, reportedly bought a 7.6 percent stake in Robinhood on May 2, according to a U.S. Securities and Exchange Commission (SEC) filing.
With $648 million invested in the U.S. financial services company, or 56 million shares, SBF becomes its third largest shareholder. The purchase was disclosed via a Form 13D, which is used when investors plan to take an active role in the company concerned, for example via a position on the board of directors.
The CEO of FTX revealed that this is not on the agenda at the moment, but that it is not excluded in the longer term either.
This new investment could be decisive for the future of Robinhood. Indeed, a few hours before the announcement of the purchase of these shares by Sam Bankman-Fried, the company’s shares had reached $7.71, their lowest level ever.
However, the price has recovered following the announcement, with shares currently trading at $10.70 on the Nasdaq exchange.
SBF said in the SEC filing that its stake in Robinhood was purely financial and “represents an attractive investment,” to which Robinhood responded “of course we think it’s an attractive investment too” via a tweet.
Robinhood present in crypto-currencies
Since it began to direct its service to the crypto-currency market, the company Robinhood has gradually captured the interest of a growing number of users. For example, from 2020 to 2021, this number has almost doubled from 12.5 to 22.7 million.
That said, the company seems to be struggling to keep its users, and revenues are not keeping up: the number of monthly active users dropped by 10% in March compared to the same period last year, to 15.9 from 17.7 million. As a result, Robinhood had to lay off 9% of its employees last month.
However, the company has not stopped making new announcements since the beginning of this year, for example with the release of its “Cash Card”, a payment card designed to attract a young audience, which allows users to round up their daily transactions to the nearest euro in order to save easily.
More recently, it announced its intention to acquire Ziglu, a UK-based cryptocurrency exchange platform, demonstrating its desire to establish a solid foothold in the UK.
