FTX's Sam Bankman-Fried Spots Offer Opportunity in Troubled Markets

FTX’s Sam Bankman-Fried Spots Offer Opportunity in Troubled Markets

  • Bankman-Fried takes a 7.6% stake through Emergent Fidelity Technologies, of which it is the sole director and majority owner
  • The shares bought were worth around $605 million on Friday afternoon

Head of crypto exchange FTX bought a 7.6% stake in investment platform Robinhood.

Although Sam Bankman-Fried’s company was not involved in the deal, he said that FTX could participate in the next wave of mergers and acquisitions to come, he believes.

Bankman-Fried, founder and CEO of FTX, bought about 56 million Robinhood shares, according to a recent regulatory filing, at a cost of about $648 million.

The shares were valued at around $605 million as of 3:45 p.m. ET Friday, up about 25% from the previous day but still below the price he paid.

The purchase was made through Emergent Fidelity Technologies, a company incorporated in Antigua and Barbuda, according to the document. Bankman-Fried is the majority owner of Emergent.

Bankman-Fried declined to comment today on the Robinhood deal, which did not involve FTX, but in a recent interview with Blockworks, he said tough market conditions in the digital asset space could trigger a surge. mergers and acquisitions activities.

“There’s going to be a ton of mergers and acquisitions,” he said, adding that “it wouldn’t be totally shocking” for FTX to acquire some of the business of the shrinking exchanges.

Last year, the US subsidiary of FTX purchased digital currency futures and an options exchange LedgerX to bring crypto derivatives to its US user base. Most recently, FTX revealed in February that it was set to acquire fintech company Liquid Group in a bid to navigate Japanese crypto exchange laws.

A Robinhood spokesperson also declined to comment, instead pointing to a Twitter thread the company posted on Thursday.

“We are redoubling our efforts to create a multi-generational business where customers can create wealth for their generations,” the tweet read. “Of course, we think it’s also an attractive investment. We have the best customer base, we’re launching great new products and we have the team to deliver.

Robinhood announced a net loss of $392 million in the first quarter.

The company’s net revenue was $299 million in the first three months of 2022, compared to $522 million in the first quarter of 2021. Transaction-based revenue was $218 million, about half of what they were a year ago. Crypto transactions accounted for $54 million of that revenue, up from $88 million in Q1 2021.

Dan Keeler contributed to this story.

  • Ben Strack

    Ben Strack is a Denver-based journalist who covers macro and crypto-native funds, financial advisors, structured products, and the integration of digital assets and decentralized finance (DeFi) into traditional finance. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence and served as a reporter and editor for various local Long Island newspapers. He graduated from the University of Maryland with a degree in journalism. Contact Ben by email at [email protected]

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