Topline
Shares of well-liked inventory buying and selling app Robinhood surged larger on Monday after experiences that billionaire Sam Bankman-Fried’s cryptocurrency alternate, FTX, is contemplating a deal to purchase the corporate simply over a month after he first disclosed a stake.
The information comes simply over a month after FTX’s billionaire founder, Bankman-Fried, disclosed a large … [+]
Key Info
One of many largest crypto buying and selling exchanges on the earth, rivaling the likes of Coinbase and Binance, FTX is internally debating how one can pursue a full acquisition of Robinhood, Bloomberg first reported on Monday, citing individuals accustomed to the matter.
Shares of Robinhood spiked on the information, rising as a lot as 18% earlier than getting halted for buying and selling shortly at roughly 3:10 p.m. EDT.
The inventory held on to most of its good points after buying and selling resumed at 3:15 p.m., nonetheless rising by 14% on Monday.
Robinhood has but to obtain a proper takeover provide, whereas FTX has not made a ultimate determination on whether or not to pursue the deal and will nonetheless choose out, in keeping with Bloomberg.
The report comes simply over a month after billionaire Sam Bankman-Fried, the founder and CEO of FTX, first disclosed a 7.6% stake in Robinhood price roughly $650 million, in keeping with regulatory filings.
Bankman-Fried on the time known as Robinhood shares “a gorgeous funding,” inflicting the inventory to soar over 20% in a single day on Could 14.
Key Background
Shares of Robinhood have largely struggled amid the broader market selloff within the first half of 2022, falling over 50% in comparison with the S&P 500’s roughly 20% decline. Buyers have soured on the inventory as the corporate continues to wrestle with depressed person development on its platform in addition to declining buying and selling revenues. Robinhood shares now commerce at practically $10 per share, nonetheless a far cry from a report excessive of $85 per share final August.
Tangent
Cryptocurrencies have been rocked by a massive selloff this 12 months as buyers flee to safer bets amid a backdrop of rising charges, excessive inflation and looming recession fears. The worth of Bitcoin dropped beneath $20,000 earlier this month amid a handful of crypto corporations both halting gross sales or saying layoffs.
Massive Quantity
$20.6 billion. That’s how a lot Bankman-Fried is worth, in keeping with Forbes’ estimates. After launching FTX in 2019, he’s now one of many richest individuals in crypto, along with his firm reaching a $40 billion valuation in the beginning of 2022.
Additional Studying
Robinhood Shares Crater After Dismal Earnings, Monthly Active Users Fall 10% From A Year Ago (Forbes)
Warren Buffett Cautions Against Stock Market ‘Casino’ As Charlie Munger Slams Robinhood (Forbes)
Robinhood Losses Spell The End Of An Era For Young Investors Who’ve Never Traded Through A Downturn (Forbes)