Robinhood shares rose by 14 percent after multiple news channels reported a possible deal between the crypto and trading app and crypto exchange FTX. The news which hit business headlines, on Monday spoke of a possible acquisition of the online trading app that soared to great heights of monthly users during the pandemic as many newbie investors used the trading platform for their first and subsequent trades.
Robinhood stock saw its highest rise in the session and trading was briefly stopped as a report said that a huge crypto exchange FTX was internally discussing a plan to takeover the trading company. Bloomberg was the first to report that people familiar with the matter had shared this news with the news outlet.
Later on Monday, Sam Bankman-Fried the CEO of FTX denied the report of an acquisition but said that they were excited about the business prospects of Robinhood as well as ways in which they could partner with trading app. The CEO also said there were “no active M&A conversations with Robinhood” while the trading platform declined to comment, according to a report in CNBC.
A filing with the Securities and Exchange Commission, in May indicated that Bankman-Fried had taken a 7.6 percent stake in Robinhood. It was worth $648 million and shares were bought as they “represent an attractive investment.”
FTX is a huge global crypto exchange and a possible acquisition of Robinhood by the derivatives products company would have been attractive for the trading app which has seen its share price fall by 48 percent so far, in 2022.
In its first quarter earnings report, Robinhood said that its revenue fell to $299 million, which is a 43 percent drop, when compared with the same quarter, last year. The company also reported a drop in monthly active users. In 2021, there were 17.7 million users and in its recent report monthly active users were 15.9 million.
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