Sam Bankman-Fried, often referred to as SBF, acquired a significant stake in the popular online brokerage.
The troubled online brokerage Robinhood
, which gained popularity in the 2021 GameStop trading saga, yesterday received some much-needed relief.
A filing by the U.S. Securities and Exchange Commission detailed that FTX CEO Sam Bankman-Fried bought a 7.6% stake in the trading app. The iconic crypto billionaire purchased $648 million in Robinhood shares at an average price of $11.52.
The news sent the stock flying in after-hours trading, spiking more than 30% on the news. At the time of writing, HOOD is trading at $10.39, which is still a healthy 21% gain.
The filing discloses that SBF began purchasing Robinhood stock in mid-March and only finished his purchases last Wednesday. According to the filing, SBF has "no intention of taking any action toward changing or influencing the control" of the company but merely saw it as an "attractive investment." The Robinhood social media team unsurprisingly agreed with that assessment:
The purchase comes off the back of a torrid twelve months
for the company.
HOOD shares recently hit a low of $7.71, a stunning decline from its IPO price of $55 in July 2021. The company's revenues have been declining, with Decrypt reporting
an 18% decline in Robinhood's Q1 2022 revenue. That possibly influenced the company's decision to lay off
9% of its employees just three weeks ago.
However, Robinhood's crypto division has been growing, with a 13% increase in crypto trading revenue in Q1. The company famously gave in to customer demands last month and listed the popular SHIB meme coin
for trading. The announcement came with the rollout of its crypto wallet and plans to integrate the Lightning Network with its app.
Robinhood will hope that the transaction, which was executed by an Antiguan firm called Emergent Fidelity Technologies Ltd owned by SBF, will reverse its fortunes for the better.
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