FTX Shoots Down Claims of Exploring an M&A Deal with Robinhood

FTX does not have active M&A conversations with Robinhood, FTX CEO Sam Bankman-Fried told CNBC in an emailed statement. Bankman-Fried’s disclosure came after Bloomberg reported that FTX is exploring opportunities to acquire the American crypto and stock trading platform. Bloomberg’s report cited people familiar with the matter.

While Bankman-Fried claims FTX is not holding any M&A talks with Robinhood at the moment, he said:

We are excited about Robinhood’s business prospects and potential ways we could partner with them, and I have always been impressed by the business that Vlad and his team have built.

Notably, Robinhood features a dual-class shareholder setup whereby the company’s founders – Vladimir Tenev and Baiju Bhatt – control 64% of the voting power. This setup means Robinhood needs the founders’ approval before inking any M&A deal.

However, it is worth noting that Bankman-Fried already owns a 7.6% equity stake in Robinhood. Bankman-Fried purchased the stake through Emergent Fidelity Technologies. This purchase made Emergent – which lists Bankman-Fried as the Director and majority owner – the third-largest Robinhood shareholder.

According to an SEC filing, Emergent plans to hold the shares as an investment. Additionally, the company does not intend to take any action toward changing or influencing Robinhood’s control. 

HOOD Jumped 14% Yesterday Before Falling Again

After Bloomberg’s report, Robinhood’s stock (HOOD) surged by 14% yesterday and traded as high as $9.47. However, HOOD started correcting downward after Bankman-Fried’s statement and was changing hands at $8.8 in pre-market trading today. 

Although Robinhood only supports seven cryptocurrencies, its crypto business revenue helped with its IPO journey. As a result, the company increasingly got interested in the nascent sector and even announced a crypto wallet in May.

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However, the crypto winter has had a devastating effect on the stocks of crypto-related companies. HOOD is down more than 50% year-to-date. Apart from HOOD, the stocks of firms like Coinbase (COIN), MicroStrategy (MSTR), and Riot Blockchain (RIOT), to name a few, are down more than 50% year-to-date.

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