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Key Insights:
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Sam Bankman-Fried has spent $648 million on Robinhood stock.
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The millennial trading platform aims to expand internationally.
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HOOD prices jumped more than 20%, but the FTX exchange token has been battered in the crypto market rout.
The big share purchase has granted Bankman-Fried a 7.6% stake in Robinhood. He labeled it an “attractive investment” and settled on a cool $648 million in company shares at an average price of $11.52.
The crypto billionaire said that he has “no intention of taking any action toward changing or influencing the control” of Robinhood and bought the stake just as an investment.
There is a possibility that he may offer the company “strategic alternatives or operational or management initiatives,” according to reports.
According to a securities filing, Bankman-Fried began making the purchases in mid-March and continued into this week buying the stock through Emergent Fidelity Technologies, an investment vehicle he controls. Crypto industry investor Anthony Pompliano was quick to offer a comment:
Robinhood Branching Out
Robinhood went public in July 2021 as one of the most highly anticipated IPOs of the year. The firm offers stock and crypto trading targeting a largely millennial customer base. The company saw revenues soar during the 2021 crypto boom when new traders flocked to the platform; however, trading activity was lackluster in 2022 with the market meltdown.
Robinhood has ambitions to compete with Coinbase [COIN] and expand internationally, purchasing a UK crypto firm in April. FTX also has plans for expansion, having opened a waitlist for a new stock trading platform earlier this year.
Bankman-Fried is one of the wealthiest people in the crypto industry. In April, Forbes estimated his net worth to be $24 billion, making the 30-year-old the second richest person in the industry behind Binance boss Changpeng Zhao. However, the estimate has been reduced to $21 billion due to the recent market rout.
Bankman-Fried has been a proponent of Robinhood, having previously complimented the company and its brand.
“Robinhood barely even needs to advertise; their name conveys their brand and message without the need for any additional colour.”