The crypto exchange FTX internally considering how to use the app-based broker Robinhood could best take over, a person close to the company, who wished to remain anonymous, told Bloomberg. Robinhood has yet to receive a formal takeover offer from FTX, another person said. Nevertheless, various media houses report, including Forbes and Reuters from a supposed takeover: The takeover rumor mill is bubbling.
Robinhood and FTX: The Takeover Rumors
FTX CEO Sam Bankman Fried said in a opposite TechCrunch issued a statement that his company is not currently attempting to acquire Robinhood. Nevertheless, he showed great interest in the neo-broker. “We are excited about the business prospects for Robinhood and the opportunities we can work with them. Other than that, there are no active acquisition talks with Robinhood,” said Bankman-Fried.
Forbes is still assuming a takeover. According to a recent article on Bankman-Fried, “Like JP Morgan, during the 1907 stock market crash, Bankman-Fried is using the crypto chaos to expand his empire.” Is that just an assertion or is there more to the assumption?
The long-standing interest in Robinhood speaks in favor of a takeover. The crypto millionaire and FTX CEO already acquired a 7.6 percent stake in the discount broker in May. The stake was valued at $650 million. At the time, Bankman-Fried said the purchase reflected his belief that Robinhood was an “attractive investment,” but that he had no intention of taking control of the company. So it is no surprise that the current speculation has arisen and takeover rumors are circulating.
Robinhood stock price reacts to rumors
It remains to be seen if the purchase will go through and if FTX will make a formal offer to Robinhood. However, HOOD’s shares appear to have reacted positively to the news, as the price traded below $8 before Bloomberg’s report and jumped to $12 afterwards. The price is currently trading at $8.90 again.
Robinhood’s dual-class stock gives the founders control of 64 percent of the outstanding voting shares. That makes a so-called hostile takeover practically impossible without internal support. How the supposed takeover will continue is still unclear at the moment.