Bankman-Frieds FTX says it is not in talks to acquire Robinhood

The Robinhood Markets, Inc. logo is seen at a pop-up event on Wall Street following the company’s IPO in New York City, the United States, July 29, 2021. REUTERS/Andrew Kelly

Sign up now for FREE unlimited access to

June 27 (Reuters) – Sam Bankman-Fried crypto exchange FTX said it is not in talks to acquire Robinhood Markets Inc (HOOD.O), after a report Monday claimed that the Exchange examine such a deal.

Bloomberg News reported Monday that FTX is internally discussing buying the app-based brokerage and that Robinhood has not received a formal acquisition approach, citing people with knowledge of the matter.

“There are no active M&A discussions with Robinhood,” Bankman-Fried said in an emailed statement.

Sign up now for FREE unlimited access to

Robinhood declined to comment. Shares in the retail platform fell 5% in extended trading after rising over 14% on the report.

Last month, the FTX founder and CEO revealed a 7.6% stake in Robinhood, but said he had no intention of taking control of the retail platform.

Robinhood’s dual-tier stock gives its founders control of 64% of the outstanding voting shares, making acquisitions virtually impossible without their support. Continue reading

The popular trading platform has come under pressure this year as trading volumes slow after the frenetic pace of 2021 — when retail investors used it to pump money into shares of so-called meme stocks like GameStop (GME.N) and AMC Entertainment (AMC.N).

That slowdown, coupled with a sell-off in high-growth tech stocks, has caused Robinhood shares to plummet nearly 50 percent this year. The company had a market valuation of nearly $7 billion at Friday’s close.

The US arm of FTX announced in May that it would launch a stock trading platform by the end of the summer. Last week, the company acquired partner Embedded Financial Technologies for an undisclosed amount, which would add custody, execution and clearing services to its stock trading platform.

FTX and its billionaire founder Bankman-Fried bailed out other players during the recent crypto market crash. It provided crypto lender BlockFi with a $250 million revolving credit facility to help the company avoid a liquidity crunch.

Sign up now for FREE unlimited access to

Reporting by Manya Saini in Bengaluru, John McCrank and Krystal Hu in New York; Edited by Aditya Soni and Richard Chang

Our standards: The Thomson Reuters Trust Principles.