According to a Bloomberg report, FTX, the world’s second largest crypto exchange, was allegedly considering making a deal to buy Robinhood on June 27. The report had a huge impact on Robinhood’s declining stock price because it caused its share price to increase by 14% (NASDAQ:HOOD). As per the media sources, FTX is internally exploring various acquisition strategies to acquire Robinhood.
BREAKING: FTX is reportedly considering a deal to acquire Robinhood.
— Watcher.Guru (@WatcherGuru) June 27, 2022
According to a June 28 media report, FTX CEO Sam Bankman Fried has emphasised on the record that the crypto exchange is not currently in negotiations to acquire Silicon Valley-based online trading platform Robinhood. Currently, the decision to purchase and talks regarding Robinhood were made internally and have not yet been made public. The sources are being kept private.
FTX CEO, Sam Bankman-Fried, denied the report, stating:
“We are excited about Robinhood’s business prospects and potential ways we could partner with them.”
He went on to say:
“That being said, there are no active M&A conversations with Robinhood.”
According to the SEC filing, Bankman-Fried invested close to $600 million in total to purchase 56 million shares of Robinhood. Last month, FTX gained a 7.6% share in Robinhood thanks to the transaction. According to the sources, Bankman-Fried bought the shares because they “offer an interesting investment.”
Robinhood went public last year, with its stock reaching a peak of $55 in July, just after its Initial Public Offering (IPO). However, the share price of Robinhood stocks has seen a massive decline. Its share price is down by 75% since its IPO. Robinhood shares have decreased by around 48% this year due to dwindling users and revenue. According to Robinhood, its monthly active users fell from 17.7 million to 15.9 million.
FTX also provides spot trading and derivatives products for more experienced traders which is in line with Robinhood services. According to the experts, the acquisition of Robinhood and the merge will be beneficial for the crypto community as the main focus will be very crypto orinitated.
In the past few weeks, FTX has been investing in many small crypto players. FTX offered BlockFi, a $250 million revolving credit line as a loan for cryptocurrencies for its expansion. Bankman-Fried’s quantitative trading company Alameda also provided $500 million funding to the crypto brokerage Voyager Digital.
Read more:
- FTX recruits additional people regardless of market circumstances: FTX CEO
- Crypto exchange FTX acquires Bitvo to strengthen its foothold in Canada
