Thu, December 08, 2022

FTX Buys 7.6% Stake in Robinhood But Denies Takeover Talks

Broker News

According to a Bloomberg report, Crypto exchange FTX is considering acquiring the American retail trading platform, Robinhood (Nasdaq: HOOD). The report cites anonymous sources as there is no official announcement about the deal yet.

Sam Bankman-Fried, the founder and CEO of FTX, acquired a 7.6% stake in the commission-free broker. Bankman-Fried stated that he had no desire to take a controlling stake in the brokerage.

Even though Robinhood has not received any formal takeover bid from FTX, the company is reportedly considering the possibility of a merger. However, a financial decision on the acquisition has yet to be made.

“We’re happy about Robinhood’s prospects for success and potential collaborations with them,” Bankman-Fried said in a statement to the press. “However, he said FTX had no acquisition talks with Robinhood.”

A Lifeline for Robinhood?

With its commission-free model, Robinhood revolutionized the retail stock trading business. During the epidemic, when demand for retail trading skyrocketed, its revenue increased dramatically. It also established itself as a leading crypto exchange in the United States by offering services for some meme currencies.

However, it has been having difficulties in recent quarters. In the first quarter of 2022, active monthly traders on the platform decreased to 15.9 million from 17.7 million a year ago. Furthermore, revenue fell by 43% to $299 billion.

The prospect of Robinhood’s acquisition has invigorated stock traders. On Monday, the public stock price of the retail stock trading platform closed 14% higher. HOOD’s stock price, on the other hand, is still down 50% from its beginning in 2022 and more than 83% from its peak.

According to a recent US House Committee study, Robinhood was unable to meet the demand for its stock on several occasions during the GameStop rally in early 2021.

YOU MAY ALSO LIKE

Stock Market Comes Under Pressure Again

Investors continue to worry that stronger-than-expected economic data will lead authorities to

Almost anywhere around the globe, buying a home has become a tall

Fees

How do Crypto Network Fees work? Transaction costs. Commonly referred to as

COMMENTS

Leave a Comment

Your email address will not be published. Required fields are marked *

User Review
  • Support
    Sending
  • Platform
    Sending
  • Spreads
    Sending
  • Trading Instument
    Sending

BROKER NEWS

BROKER NEWS