Samuel Bankman-Fried, chief executive of cryptocurrency exchange FTX, has taken a 7.6% stake in Robinhood Markets Inc. worth approximately $648.2 million.
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According to a 13-D filed with the Securities and Exchange Commission Thursday, Bankman-Fried’s firm Emergent Fidelity Technologies purchased shares of the commission-free trading platform between March 14 and May 11, ranging from as low as $8.01 per share to as high as $13.85 per share. Bankman-Fried is Emergent’s sole director and majority owner.
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The filing emphasizes that Bankman-Fried acquired the stake because he views Robinhood as an “attractive investment.” He does not have “any intention of taking any action toward changing or influencing the control” of the company.
However, the filing notes that Bankman-Fried may engage in discussions with Robinhood’s board and investors from time to time regarding its business, performance and investment returns. It also says Bankman-Fried could review options for enhancing Robninhood’s stockholder value through “various strategic alternatives or operational or management initiatives” or acquiring additional shares.
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In a tweet following news of Bankman-Fried’s stake, Robinhood said it is “doubling down on creating a multi-generational company where customers can build wealth for their generations.”
“Of course we think it is an attractive investment too,” the company added. “We have the best customer base, are introducing great new products, and we have the team to deliver. Our journey is just beginning.”
Robinhood shares soared during Friday’s trading session after briefly hitting an all-time low Thursday.
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In the first quarter of 2022, Robinhood posted a net loss of $392 million, or 45 cents per share, compared to $1.4 billion, or $6.26 per share a year ago.
The company’s total net revenues fell 43% year-over-year to $299 million, while transaction-based revenue fell 48% year-over-year to $218 million. Options revenue fell 36% year-over-year to $127 million, equities revenue fell 73% year-over-year to $36 million and cryptocurrency-related revenue fell 39% to $54 million.
Robinhood has a total of 22.8 million funded accounts, including 7.1 million new accounts primarily driven by customer interest in cryptocurrencies. Monthly active users fell 10% year-over-year during the quarter to 15.9 million, while its assets under custody increased 15% year-over-year to $93.1 billion.
The company offers trading of 11 cryptocurrencies, including Bitcoin, Bitcoin Cash, Bitcoin SV, Compound, Dogecoin, Ethereum, Ethereum Classic, Litecoin, Polygon, Shiba Inu and Solana.
In the beginning of April, Robinhood rolled out a crypto wallet to approximately 2 million customers on its waitlist, which has since fully rolled out to all customers. The company is also planning to integrate the lightning network for near-instantaneous bitcoin transfers globally, with transaction fees of less than a penny.
As a result of cost reduction initiatives, including layoffs of approximately 9% of its workforce, Robinhood expects its full year 2022 operating expenses, excluding share-based compensation, to increase by up to 5% year-over-year. It also expects to incur a restructuring benefit of up to $19 million in the second quarter.