FTX Looks To Purchase Robinhood: Report

FTX looks to purchase Robinhood but previously it denied the reports from Bloomberg, citing no active M&A conversations happening about a purchase so let’s read more today in our latest cryptocurrency news.

FTX looks to purchase Robinhood but that’s depending on who you are asking. Multiple people with knowledge on the matter said that the CEO Sam Bankman Fried is considering how to go about purchasing the stock and crypto tradign app. Robinhood has not yet been formally approached with an offer and no decision has been made so far. HODD shares surged on the news of the potential acquisition or up by about 14% to $9.12 as of the time of writing and the stock hit a new low of $6.89 a few weeks ago.

Shortly after the news emerged, Bankman Fried said that while he and FTX are excited about the Robinhood business prospects and the ways they could partner with them, there are no active conversations about Robinhood taking place currently. Last month, Bankman Fried purchased 7.6% of Robinhood and said at the time that he had no intention of using the stake in the company to change the influence or its direction. Shares of the popular trading app declined since hitting $55 and in April, Goldman Sachs downgraded HOOD from neutral to sell but weeks later, the company laid off hundreds of employees due to a global downturn in retail investment activity.

Those fortunes could be reversing now. While 2022’s first quarter saw Robinhood’s revenue getting down on the board, there was one category that kept on growing and that is crypto. Just this morning, Goldman Sachs released a revised position of HOOD and upgraded the status to neutral in light of the higher itnerest rates that the bank hopes will help reduce HOOD’s losses to a manageable level. The reports also show that FTX was in negotiations to acquire as take in BlockFi which previously secured a $250 million line of credit from Bankman Fried’s company. Many think the loan which will be subordinate to the client funds and repay the customers is a form of bailout.

As recently reported, FTX exchange led by Sam Bankman Fried entered into a negotiations phase to acquire a stake in the crypto lending company Blockfi according to reports in the Wall Street Journal. The acquisition talks came on the heels of the BlockFi announcement that it secured a $250 million line of credit from FTX which was seen as a bailout.