Sam Bankman-Fried, CEO of crypto exchange FTX, has taken a 7.6% stake in Robinhood, according to a Thursday filing with the Securities and Exchange Commission.
Shares of the investing company jumped 36% at one point in extended trading before pulling back. They were last up about 25%.
In regular trading Thursday the stock hit an all-time low. Robinhood ended its session priced at $ 8.56, about 77% off its IPO price last July.
According to the document, Emergent Fidelity Technologies took a $ 648 million stake in Robinhood. Bankman-Fried is the sole director and majority owner, it says.
Sam Bankman-Fried, CEO of FTX US Derivatives, Testifies During the House Agriculture Committee’s Titled Changing Market Roles: The FTX Proposal and Trends in New Clearinghouse Models, in Longworth Building on Thursday, May 12, 2022.
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The document goes on to say Bankman-Fried acquired shares in the belief that they represent “an attractive investment.” “The Reporting Persons intend to hold the Shares as an investment, and do not currently have any intention of taking any action toward the controlling or influencing of the Issuer,” it says. Though the filing also said he may “engage in discussions from time to time” with management.
“Of course we think it’s an attractive investment too,” Robinhood’s communications team said in a tweet Thursday evening in response to the news of the investment.
Bankman-Fried currently has no intention of taking other actions but at some point if the circumstances change, he may review “options for enhancing stockholder value through, among other things, various strategic alternatives or operational or management initiatives,” according to the document. It also says he could acquire additional shares.
FTX, where Bankman-Fried is the CEO, is one of the largest crypto exchanges in the world and offers derivatives products for more sophisticated traders as well as spot trading. FTX has become a rival to Coinbase and Binance, though it does not offer its services in the US
Robinhood got its start allowing retail investors to invest in stocks but saw huge success when it rolled out its crypto trading platform in 2018. Crypto trading has since become important for the company’s bottom line. In the fall Robinhood revealed a crypto wallet and said the waitlist for it had topped 1 million customers.
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