Robinhood stock surges after SBF acquires 7.6% stake in retail trading giant

Sam Bankman-Fried, the laminitis of FTX and Alameda Research, has acquired a 7.6% involvement successful Robinhood.

SBF’s acquisition triggered an assertive marketplace response, with Robinhood’s shares jumping arsenic overmuch arsenic 36% successful extended trading. And portion prices person pulled backmost since Thursday evening, they’re inactive up astir 25%.

Struggling Robinhood stocks spot surge aft SBF’s investment

According to a filing with the U.S. Securities and Exchange Commission (SEC), SBF acquired the involvement done Emergent Fidelity Technologies, successful which helium owns a bulk stake.

The company, registered successful Antigua and Barbuda, bought conscionable implicit 56.2 cardinal shares of Robinhood, representing 7.6% of the company. The shares were purchased utilizing Emergent’s moving superior for $648.3 million.

Based connected the May 12 closing terms of $8.56 a share, SBF’s presumption was worthy astir $482 million. However, helium mightiness beryllium capable to erase his losses, arsenic information from Bloomberg showed the banal roseate arsenic precocious arsenic $10.46 successful pre-market trading successful New York.

While SBF noted successful the disclosure that helium intends to clasp the shares arsenic an concern and not power the company, his presumption comes astatine a important clip for Robinhood. The institution has been struggling with losing marketplace dominance arsenic its shares dropped 77% since its controversial IPO successful July 2021.

Robinhood saw its popularity detonate successful 2020 during the pandemic, managing to seizure a important portion of the recently emerging retail trading market. The immense popularity meme stocks and cryptocurrencies saw connected the level enabled it to amass 22.7 cardinal users by the extremity of past year, which cemented Robinhood arsenic a unit to beryllium reckoned with successful the retail market.

However, contempt its rising fig of users, trading enactment connected the level has been steadily declining, and the institution has been struggling to support volumes up and support its gross stream.

Robinhood indicated that cryptocurrencies would beryllium 1 of its apical areas of absorption for maturation this year, arsenic gross from crypto trading made up 18% of its full nett gross past quarter. With the enactment of SBF, who indicated successful his disclosure that helium mightiness instrumentality a much progressive relation successful the institution successful presumption of strategical initatives, Robinhood has the substance to grow to the crypto marketplace adjacent more.

And portion neither Robinhood nor SBF has straight commented connected the news, Robinhood shared a connection connected its authoritative connection transmission saying it was “doubling down connected creating a multi-generational institution wherever customers tin physique wealthiness for their generations.”

“Of coursse we deliberation it is an charismatic concern too,” the institution said successful a tweet. “We person the champion lawsuit base, are introducing large caller products, and we person the squad to deliver.”

Our travel is conscionable beginning.

— Robinhood Comms (@RobinhoodComms) May 12, 2022