Bankman-Fried's FTX Seeking Path to Buy Robinhood, No Formal Approach Made Yet: Report

FTX's founder and CEO revealed a 7.6 percent stake in Robinhood last month but said he did not have any intention of taking control of the platform.

By Reuters | Updated: 28 June 2022 03:45 IST

Bankman-Fried's FTX Seeking Path to Buy Robinhood, No Formal Approach Made Yet: Report

Photo Credit: FTX US

Robinhood's dual-class shares give its founders control of 64 percent of the voting shares

Highlights

FTX was also said to be is in talks to acquire a stake in BlockFi
Robindhood shares were down 4 percent in extended trading
Robinhood declined to comment

Sam Bankman-Fried's FTX crypto exchange is exploring whether it might be able to acquire Robinhood Markets, Bloomberg News reported on Monday, citing people with knowledge of the matter.

FTX is discussing internally how to buy the app-based brokerage and Robinhood has not received a formal takeover approach, the report said.

Robinhood declined to comment. The retail-trading platform's shares were down 4 percent in extended trading after initially rising on the report.

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"We are excited about Robinhood's business prospects and potential ways we could partner with them," Bankman-Fried said in an emailed statement. He, however, added that "there are no active M&A conversations with Robinhood."

Last month, the founder and CEO of FTX revealed a 7.6 percent stake in Robinhood but said he did not have any intention of taking control of the retail-trading platform.

Robinhood's dual-class shares currently give its founders control of 64 percent of the voting shares outstanding.

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The brokerage has come under pressure this year as trading volumes ease from 2021's frenetic pace — when retail investors used the platform to pump money into shares of so-called meme stocks such as GameStop and AMC Entertainment.

That slowdown, along with a sell-off in high-growth technology stocks, has driven a near 50 percent slump in Robinhood shares this year. The company has a market valuation of nearly $7 billion (nearly Rs. 54,900 crore) as of Friday's closing price.

In other recent news, cryptocurrency exchange FTX was also said to be is in talks to acquire a stake in crypto lender BlockFi, according to a Wall Street Journal report, citing people familiar with the matter.

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The companies had previously announced that BlockFi had signed a term sheet with FTX for a $250 million (roughly Rs. 1,955 crore) revolving credit facility, which will give BlockFi crucial access to capital amid a rout in the digital currency market.

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