Sam Bankman-Fried’s FTX is reportedly wanting into shopping for Robinhood

Cryptocurrency alternate FTX is reportedly contemplating an acquisition of the buying and selling platform Robinhood, in keeping with a report from Bloomberg. Sources near the state of affairs instructed Bloomberg that FTX remains to be weighing the chance and hasn’t but made a suggestion.

When requested concerning the doable buyout, FTX CEO Sam Bankman-Fried acknowledged that the corporate at present isn’t within the technique of making an attempt to amass Robinhood. “We’re enthusiastic about Robinhood’s enterprise prospects and potential methods we might associate with them,” Bankman-Fried stated in a press release to Bloomberg. “That being stated, there aren’t any lively M&A [mergers and acquisitions] conversations with Robinhood.” The Verge reached out to FTX with a request for remark however didn’t instantly hear again. Robinhood declined to touch upon the story.

In Could, Bankman-Fried disclosed his 7.6 percent stake in Robinhood, which was price about $648 million on the time, in keeping with a 13D Securities and Exchange Commission filing. This type of filing is used when somebody acquires greater than 5 % of an organization however might additionally sign a possible takeover. Robinhood CEO Vlad Tenev and CCO Baiju Bhatt each personal about 8 % of the corporate and, as Bloomberg notes, management over 50 % of the corporate’s voting energy. Robinhood shares climbed 12 % following information concerning the potential acquisition.

As cryptocurrencies — and shares usually — take a tumble as we enter what some contemplate a “crypto winter,” Bankman-Fried and his FTX alternate have been pivotal in providing bailouts to struggling blockchain companies. FTX prolonged $250 million in revolving credit score to crypto buying and selling platform BlockFi, and Bankman-Fried’s Alameda Analysis has additionally lent $500 million to crypto brokerage Voyager Digital.

Widespread financial uncertainty has affected Robinhood’s enterprise as effectively — in its most recent earnings report, its month-to-month lively customers dipped 10 % to fifteen.9 million in March 2022, in comparison with 17.7 million in March 2021. Its income additionally fell 48 % yr over yr, from $522 million to $299 million.

Robinhood has develop into a well-liked buying and selling platform amongst younger traders because of its commission-free trades, in addition to the supply of each conventional shares and crypto-based investments. It has been working to develop its crypto choices since first rolling out the option in 2018 and launched its personal cryptocurrency pockets earlier this month. The corporate went public final yr after driving out the meme inventory wave that despatched AMC and GameStop shares hovering. In response to Bloomberg, Robinhood has misplaced about three-quarters of its market valuation since then, which at present sits at $7.4 billion.