Sam Bankman-Fried, the billionaire founder of cryptocurrency exchange FTX, has announced a 7.6 per cent stake in the struggling retail brokerage Robinhood, calling it an “attractive investment”.
Bankman-Fried said in a securities filing he has no “intention of taking any action toward changing or influencing the control of [Robinhood]” and bought the stake purely as an investment. However, he left open the possibility of calling for the company to consider “strategic alternatives or operational or management initiatives”.
Shares in Robinhood rose as much as 32 per cent in after-hours trading following the announcement.
Bankman-Fried purchased $648mn in Robinhood shares at an average price of $11.52. The purchases disclosed by Bankman-Fried began in mid-March and continued through Wednesday, when he purchased $27.5mn in shares, according to a regulatory filing.
Robinhood went public in July in a hotly anticipated debut. But shares in the brokerage have stuttered as retail enthusiasm for stock trading has faltered in recent months. Shares in the broker had fallen more than 70 per cent since then, ahead of Thursday’s disclosure.
Robinhood has pushed heavily into cryptocurrencies as revenue from equity trading has tumbled, launching crypto wallets on its platform and adding new currencies, bringing it more in line with competitors such as Coinbase. It plans to expand internationally as a crypto brokerage.
Bankman-Fried has previously spoken about the strength of the broker’s brand: “Robinhood barely even needs to advertise; their name conveys their brand and message without the need for any additional colour,” he had written on Twitter.