Robinhood hovers after 30-year-old crypto billionaire takes ownership

New York
CNN Business

It’s been a brutal year for Robinhood. The two dips of stocks and bitcoin have crushed the online brokerage house’s sales. The company also reported losses and declines in users. The stock has fallen 40% this year and Robinhood recently announced a major round of layoffs.

But there may be hope on the horizon.

Shares of Robinhood rose more than 25% on Friday after an investment company run by 30-year-old cryptocurrency billionaire Sam Bankman-Fried revealed in a document from the Securities and Exchange Commission that they had bought a 7.6% stake in the company.

Bankman-Fried, who runs the startup FTX, a Bahamas-based cryptocurrency exchange, said in the archive that he bought Robinhood shares because he believes they “represent an attractive investment.” He added that his stake is meant to be a passive investment and that he “currently has no intention of taking any action to change or influence the control of” Robinhood.

(Of course, Elon Musk’s first investment in Twitter (TWTR) seemed passive before Tesla (TSLA) and the SpaceX boss changed their minds and then decided to buy the whole of Twitter (TWTR) … a deal that is now pending .)

FTX has taken the crypto world by storm, attracts more than a million users since its launch in 2019, so having its founder as a strategic investor in Robinhood can help give the brokerage more credibility, not to mention a supporter with a lot of money at its disposal.

The privately owned FTX recently acquired new financing that values ​​the company at $ 32 billion. According to data tracked by Forbes, Bankman-Fried, who is also the founder of the crypto-trading company Alameda Research, is worth $ 21.2 billion.

FTX had no further comments on Bankman-Peace’s Robinhood share. Robinhood issued a statement Thursday confirming this Robinhood communications team Twitter feedand said that “we are doubling down on creating a multi-generational company where customers can build wealth for their generations.”

“Of course we think it’s an attractive investment too. We have the best customer base, introduce great new products, and we have the team to deliver. Our journey has just begun, Robinhood added.

The Bankman-Fried investment could help Robinhood get back on track. Robinhood, along with cryptocurrency rival Coinbase, has struggled this year due to financial market volatility.

Shares in Coinbase, which plunged earlier this week after a miserable earnings report and weak outlook, rose in line with Robinhood on Friday. The Coinbase share was up about 25%. But stocks are still down 30% this week and more than 70% this year.

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