Wednesday, September 28, 2022

FTX not in talks to acquire brokerage firm Robinhood

Crypto exchange FTX has said it is not in talks to acquire brokerage firm Robinhood Markets Inc. Last month, FTX founder and chief executive Sam Bankman Fried disclosed a roughly 7.6 percent stake in Robinhood. However, he denied any plans to take control of the trading platform.

by Bloomberg Report Granted that FTX is in talks internally to buy Robinhood, an app-based brokerage. Along with this, it was also told that no proposal has been given to Robinhood regarding this. “There are no merger and acquisition discussions with Robinhood. We are excited about Robinhood’s business prospects and the way we engage with them,” Sam said in an emailed statement. Robinhood declined to comment on this. The firm’s shares rose after reports of the possibility of an acquisition by FTX.

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Robinhood’s dual-class shares give its founders greater voting rights in the company. For this reason it is very difficult to acquire it without the support of the founders. Robinhood’s business boomed in the last year. However, the firm is under pressure this year with trading volumes falling drastically. Robinhood’s shares are down nearly 50 percent this year due to a market downturn and selloff in technology stocks. The firm has a market capitalization of around $7 billion.

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The increase in interest from the US Federal Reserve has also had a big impact on the markets. The US unit of FTX said last month that it was preparing to launch a stock trading platform. Recently it acquired Embedded Financial Technologies. This will help FTX add services to its equity trading platform. FTX has also helped firms facing liquidity crunch due to the massive downturn in the crypto market. It gave about $250 million in credit to crypto lending firm BlockFi.

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