FTX chief takes stake in online brokerage Robinhood

Sam Bankman-Fried, the billionaire founder of cryptocurrency exchange FTX, has announced a 7.6% stake in troubled retail brokerage Robinhood, calling it an “attractive investment.”

Bankman-Fried said in a securities filing that he “does not intend to take any action to change or affect the [Robinhood]” and buying shares purely as an investment. However, he reserved the possibility of calling on the company to consider “strategic alternatives or operational or management moves”.

Shares of Robinhood jumped 32% in after-hours trading following the announcement.

Bankman-Fried bought $648 million of Robinhood stock at an average price of $11.52. The disclosed purchases by Bankman-Fried began in mid-March and continued through Wednesday, when he bought $27.5 million in stock, regulatory filings show.

Robinhood went public in July in a highly anticipated debut. But the brokerage’s shares have been depressed in recent months as retail enthusiasm for stock trading has waned. Since then, the broker’s shares had fallen more than 70% before Thursday’s disclosure.

Robinhood has made a big push into cryptocurrencies as revenue from stock trading has slumped, launching crypto wallets and adding new currencies to its platform to bring it more in line with rivals like Coinbase. It plans to expand internationally as a cryptocurrency brokerage.

Bankman-Fried has previously spoken about the strength of the broker’s brand: “Robinhood requires little to no advertising; their name conveys their brand and message without any additional color,” he wrote on Twitter.

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