The purchase boosted Robinhood’s stock by 30% just hours after it hit an all-time low.
The CEO of crypto exchange FTX, Sam Bankman-Fried, has purchased a 7.6% stake in stock and crypto trading software Robinhood. This is according to a document filed with the US Commission on Securities and Exchange Government today.
Soaring over 30%
In after-hours trading, news of the purchase pushed Robinhood stock up more than 30%. As of this writing, the stock had dropped to $10.72.
According to the SEC filing, Bankman-Fried purchased over 56 million shares of Robinhood through Emergent Fidelity Technologies. The shareholding currently values at over $600 million.
The investment comes at a time when Robinhood’s fortunes and revenues are waning. Robinhood shares hit an all-time low of $7.71 only hours before news of Bankman-investment Fried’s in the company broke.
Since topping $55 shortly after its IPO last July, the stock has slowly declined. Since then, the company’s revenues have also decreased. The company’s revenue dropped 18 percent in the first quarter of 2022. It laid off 9% of its workers three weeks ago. It removed between 300 and 350 people. The slowing growth attributes to a global decline in casual-investment activity.
Overall, Robinhood reported $299 million in net sales for the quarter, down about 18 percent from $363 million in Q4 2021. It’s a bigger drop than it was this time last year, when the stock and cryptocurrency trading software brought in $522 million in net revenue.
The status of Robinhood’s bitcoin business is not detailed in its maiden report. However, the company hosted a conference call that afternoon. Solana, Shiba Inu, Polygon, and Compound are among the newcomers mentioned in the article. It does, however, include plans to support Bitcoin’s Lightning Network for payment processing.
Furthermore, other crypto opportunities were still available on Robinhood at the time. It stated that new crypto items would release this year.
Upswing in Crypto
The same quarterly report revealed that Robinhood was really growing in one area: cryptocurrency. While traditional asset investment slowed, the app’s bitcoin trading revenue increased by 13% in Q1. Robinhood’s crypto products have been constantly growing. Solana, Shiba Inu, Polygon, and Compound were introduced to the platform last month.
Bankman-Fried indicated in his SEC filing that he has no plans to change or affect Robinhood’s path. He claimed that he bought his stock in the company because it was a good investment.
The comment quickly picked up by Robinhood’s communication team. They also believe it is a worthwhile investment.