Sam Bankman-Fried Buys 7.6% Stake in Robinhood

– Sam Bankman-Fried, CEO of crypto exchange FTX, has bought a substantial 7.6% stake in stock and crypto trading app Robinhood, according to a filing today with the U.S. Securities and Exchange Commission.

– News of the purchase sent Robinhood shares soaring by over 30% in after-hours trading.

– Per the SEC filing, Bankman-Fried bought just over 56 million shares of Robinhood via a firm called Emergent Fidelity Technologies; the stake is currently worth about $600 million.

– The investment comes at a time when Robinhood’s fortunes and revenues have been on the decline; just hours before news of Bankman-Fried’s investment in the company, Robinhood shares hit an all-time-low of $7.71.

– The stock has dropped steadily since hitting $55 shortly after its IPO last July. Since then, company revenues have similarly been on a downswing. Most recently, the company saw an 18% decline in revenue for Q1 2022.

– And yet the same quarterly report revealed that in one division, Robinhood was actually experiencing an upswing: crypto. While investment in traditional assets faltered, the app saw a 13% increase in cryptocurrency trading revenue in Q1.

– Robinhood has been steadily expanding its crypto offerings: Last month, it added Solana, Shiba Inu, Polygon, and Compound to the platform.

– In his SEC filing, Bankman-Fried stated that he does not have any intention to change or influence Robinhood’s direction, and that he purchased his stake in the company because it “represents an attractive investment.”