Robinhood Shares Rise 23% After FTX CEO Walks In


Gamza Khanzadaev

FTX CEO Sam Bankman-Fried acquires stake in Robinhood: Shares up 23%

FTX CEO Sam Bankman-Fried bought a 7.6% stake in the Robinhood market. Based on this news, Robinhood’s stock rose 28%.

The crypto entrepreneur acquired 56.28 million shares of Robinhood for $648.29 million. The transaction was made through Emergent Fidelity Technologies, a company affiliated with Bankman-Fried, according to the US SEC Submit

The acquisition came just after the corporate crypto exchange Coinbase earlier this week denied rumors of a possible merger with Robinhood.

Despite disappointing financial results, a further stock market dump and rumors of possible bankruptcy, Coinbase executives stated in a phone call that they are not planning any fundamental changes whether or not to acquire or merge Robinhood.

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Long story short, now the prime interest of one of the most popular and hyped online brokers in the United States is in the pocket of the FTX CEO.

Why is everyone chasing Robinhood?

Robinhood is an online brokerage startup that allows users to trade the market with no commission.

Its ease of use has simplified ordinary people’s access to commerce. Rapid remote registration and the lack of fees and commissions prompted unqualified investors to rush to the market.

The startup’s main audience is millennials, with an average client age of 31, and for nearly half of them, Robinhood was the first investment platform of their lives.

Robinhood’s popularity arose during the quarantine in which people were locked up at home. In the first four months of this year, the app gained more than three million new customers and now there are more than 13 million in total. Then there was the saga of Reddit users, who used Robinhood as their main platform for pumping up and dumping stocks, shorting major hedge funds and subsequently causing a lot of headaches.

As of May 2022, Robinhood has experienced a significant decline in net sales and a decline in trading activity. Nevertheless, the millennial-force broker continued to plot and expand and even list Grayscale crypto trusts based on Bitcoin and Ethereum.

The CEO of FTX acquiring the stake should bring the project more durability and reliability, and then it will surely lead to an improvement in key indicators.

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