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HomeCrypto NewsRobinhood shares spike 30% after Sam Bankman-Fried buys $650M stake

Robinhood shares spike 30% after Sam Bankman-Fried buys $650M stake

Sam Bankman-Fried, the billionaire founder and CEO of cryptocurrency change FTX, has acquired a considerable 7.6% stake within the fashionable on-line brokerage, Robinhood. 

The information was well-received by the market, with Robinhood’s inventory worth initially hovering over 30% in after-hours buying and selling. On the time of writing, the worth has settled to a 24% total achieve.

In keeping with a securities submitting made with the US Securities and Alternate Fee (SEC) on Thursday, Bankman-Fried bought a complete of $648 million in Robinhood shares at a median worth of $11.52. The purchases disclosed by Bankman-Fried reportedly started in mid-March and continued till Wednesday.

Within the securities submitting, Bankman-Fried made it clear that he had “no intention of taking any motion towards altering or influencing the management of [Robinhood],” and that the transfer was just because he noticed Robinhood as an “enticing funding.”

Robinhood’s communications crew took to Twitter to emulate what Bankman-Fried stated in his securities submitting — tweeting to their 82,000 followers, “In fact we predict it’s a sexy funding too.”

The transaction was executed by an Antiguan agency referred to as Emergent Constancy Applied sciences Ltd, of which Bankman-fried is the only director and majority proprietor.

The announcement appears to have supplied Robinhood buyers with some short-term aid, after its inventory worth reached a new all-time low of $7.73 on March 12, simply sooner or later after the brokerage agency revealed that its crypto transaction income fell 39% year-over-year (YOY).

Robinhood has been taking significant strides into the cryptocurrency market, as income from stock-related buying and selling has fallen drastically. Robinhood at the moment offers customers with crypto buying and selling capabilities, bringing it into quick competitors with different U.S.-based cryptocurrency exchanges equivalent to Coinbase and Gemini.

According to Robinhood’s Q1 2022 report, roughly 18% of its Q1 web income got here from crypto-related transactions. Nevertheless, transaction-based income from cryptocurrencies decreased 39% YOY to $54 million, in comparison with $88 million within the Q1 2021.

Related: Robinhood axes almost 1 in 10 staff members as stock hits all-time low

In April final yr, Robinhood introduced plans to develop into cryptocurrency brokerage by purchasing United Kingdom-based crypto company Ziglu.

Earlier this month, Robinhood additionally rolled out its extremely anticipated crypto pockets to two million waitlisted users, outlined plans to combine the Lightning Community and listed Shiba Inu (SHIB) after months of campaigning from its supporters.