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The inventory soared 14% to its session excessive and was briefly halted after a report that FTX was discussing a takeover plan internally, however no supply has been made to Robinhood, Bloomberg News reported, citing folks aware of the matter.
Robinhood declined to remark.
Last month, Sam Bankman-Fried, CEO of FTX, took a 7.6% stake in Robinhood worth $648 million, based on a submitting with the Securities and Exchange Commission. The submitting stated Bankman-Fried acquired the shares within the perception that they “signify a gorgeous funding.”
Shares of Robinhood have dropped about 48% this yr amid shrinking income and declining customers. During the primary quarter, its revenue fell 43% from a year ago to $299 million. Robinhood stated its month-to-month lively customers declined to fifteen.9 million, down from 17.7 million a yr in the past.
FTX is likely one of the largest crypto exchanges on the planet and presents derivatives merchandise for extra refined merchants in addition to spot buying and selling. FTX has develop into a rival to Coinbase and Binance, although it does not supply its providers within the U.S.
In latest weeks, Bankman-Fried’s firms signed deals to bail out small players within the crypto house. FTX agreed to supply crypto lender BlockFi with a $250 million revolving credit score facility. Alameda, his quantitative buying and selling agency, dedicated $500 million in financing to Voyager Digital, a crypto brokerage.
Robinhood attracted a large variety of retail buyers through the pandemic buying and selling growth, whereas the younger dealer additionally skilled success when it rolled out its crypto buying and selling platform in 2018. Crypto buying and selling has since develop into essential for the corporate’s backside line when its inventory buying and selling exercise slowed down.
Last fall, Robinhood stated it was testing a crypto wallet and revealed that the waitlist for it had topped 1 million clients.