– Sam Bankman-Fried, the billionaire founder and CEO of cryptocurrency exchange FTX, has acquired a substantial 7.6% stake in the popular online brokerage, Robinhood.
– The news was well received by the market, with Robinhoods (HOOD) stock price initially soaring over 30% in after hours trading.
– According to a securities filing made with the Securities and Exchange Commission on Thursday, Bankman-Fried purchased a total of $648 million in Robinhood shares at an average price of $11.52.
– In the securities filing, Bankman-Fried made it clear that he had, no intention of taking any action toward changing or influencing the control of [Robinhood], and that the move was simply because he saw Robinhood as an attractive investment.
– The announcement seems to have provided Robinhood investors with some short-term relief, after its stock price reached a new all time low of $7.73 on March 12, just one day after the brokerage firm revealed that its crypto transaction revenue fell 39% year-over-year (YOY).
– Robinhood has been taking significant strides into the cryptocurrency market, as revenue from stock-related trading has fallen drastically.
– According to Robinhoods Q1 2022 report, roughly 18% of its Q1 net revenue came from crypto-related transactions, however transaction-based revenue from cryptocurrencies decreased 39% YOY to $54 million, compared to $88 million in the Q1 2021.