Robinhood shares rose 30% on the news of the purchase, just hours after it hit an all-time low.
According to a filing with the U.S. Securities and Exchange Commission, Sam Bankman-Fried (CEO of crypto exchange FTX) has purchased a 7.6% stake in stock and cryptocurrency trading app Robinhood.
Robinhood shares shot up by more than 30% after the news of the purchase. The stock was at $10.72 as of this writing.
According to the SEC filings, Bankman-Fried purchased just over 56,000,000 shares of Robinhood through a company called Emergent Fidelity Technologies. The stake currently stands at $600 million.
Robinhood’s revenues and fortunes are in decline at the moment of the investment. Robinhood shares fell to $7.71 just hours prior to Bankman-Fried’s announcement.
Since the stock peaked at $55 just after it was IPO’d last July, its share price has been steadily declining. Company revenues have also been declining since then. The company’s 18% revenue decline for Q1 2022 was the most recent. It laid off 9 percent of its workforce three weeks ago. The reason was a global downturn for casual-investment activities.
Yet, the quarterly report showed that Robinhood’s crypto division was experiencing an upswing. The app experienced a 13% increase of cryptocurrency trading revenue during Q1, despite the decline in investment in traditional assets. Robinhood is steadily expanding its crypto offerings. Last month it added Solana and Shiba inu to the platform.
Bankman-Fried stated in his SEC filing that he has no intention to influence Robinhood’s direction and that he bought his share of the company “representing an attractive investment.”
Robinhood’s communications team picked up the quote quickly, tweeting: “Of course, we think it’s an attractive investment too.”
