FTX Tempers Robinhood Buyout Reports

Key Takeaways

FTX seems to be exploring the opportunity of buying the inventory and crypto buying and selling firm Robinhood.
FTX has not prolonged a suggestion to Robinhood and is barely contemplating the plan internally at this level.
Robinhood’s inventory was valued at $9.12 right this moment, representing a rise of 14% over the previous 24 hours.

FTX is exploring the opportunity of shopping for out the retail buying and selling agency Robinhood, in keeping with stories from Bloomberg, however has denied that it’s at present in talks with the retail buying and selling app firm.

FTX Reportedly Exploring Buyout

FTX is contemplating the way it might purchase Robinhood, the agency behind the main inventory buying and selling app of the identical title, in keeping with reporting from Bloomberg. Bloomberg’s sources say that FTX is contemplating the plan internally and that no ultimate choice has been made. Moreover, Robinhood has not been approached by FTX with a suggestion.

Since Bloomberg’s preliminary report, an FTX spokesperson has acknowledged potential partnerships with Robinhood however denied a buyout. That consultant informed Blockworks that “there are not any lively M&A conversations with Robinhood.”

FTX’s curiosity in Robinhood is well-known. Final month, FTX founder and CEO Sam Bankman-Fried paid $648 million for 7.6% stake in Robinhood by way of a separate firm.

The truth that FTX launched inventory buying and selling earlier this 12 months additionally makes the corporate’s relationship with Robinhood a priceless one—both as a associate or a goal for acquisition.

Robinhood’s Lengthy-Time period Worth Is Falling

Robinhood was valued at $32 billion final 12 months, that means that such a buyout could be a big buy by any measure.

As we speak’s information appears to have boosted the worth of Robinhood inventory (HOOD) to $9.12, a rise of 14% over the previous 24 hours. That progress could also be partially as a consequence of unrelated feedback from Goldman Sachs analyst William Nance as effectively.

Regardless of right this moment’s positive factors, FTX might purchase Robinhood at a low worth. Robinhood’s inventory value has fallen dramatically within the long-term; HOOD is down 74% over the previous twelve months.

Robinhood’s decline in worth is probably going as a consequence of a short-lived buying and selling surge in 2021. Final 12 months, “meme shares” corresponding to GameStop and AMC turned standard however have since misplaced relevance.

FTX, in the meantime, stays in a robust place, at the same time as many firms are dealing with a “crypto winter.” In truth, FTX and its subsidiaries acquired two different corporations this month: the inventory clearing agency Embed Applied sciences and the crypto firm Bitvo. FTX additionally reportedly plans to purchase stake in BlockFi.

Over the previous 24 hours, FTX has seen $1.5 billion in buying and selling quantity. Its U.S. counterpart moved an extra $145 million.

Disclosure: On the time of writing, the writer of this piece owned BTC, ETH, and different cryptocurrencies.

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