Robinhood Prices Drops 20% Following News of FTX Buyout Became Known
After news that said Binance is buying Sam Bankman-Fried’s FTX, which owns 8.8% of Robinhood stock, the stock price of the publicly traded exchange dropped 20% to $9.74.
SBF Owning 7.6% Robinhood Shares
Emergent Fidelity Technologies, the firm owned by FTX CEO Sam Bankman-Fried, held 56,273,469 shares of Robinhood at the beginning of this year, making up 7.6% of the firm’s ownership position.
It was reported in an SEC filing that FTX had purchased over 56 million shares of Robinhood, a claim Bankman-Fried denied. However, HOOD’s price rose by 14% in response to the news, to $9.12.
Read More: Here Is What Lead To The Collapse Of FTX Crypto Exchange
In the midst of the pandemic, people stuck at home with government stimulus money found Robinhood an attractive trading platform and later became popular. A crowd of investors used Robinhood to resist a short squeeze on GameStop in January 2021.
Author of The Antisocial Network, Ben Mezrich spoke to Decrypt,“”Robinhood created this app that’s very fun. It certainly does gamify Wall Street to a point where it makes it as easy as a video game, there’s no fees, and with very little education, you can go on and buy and sell stocks.”
“The double edge of that sword … is that regular people also can lose a lot of money if they don’t have their eyes open and see what can happen,” Mezrich added.
Prior to the news of the FTX acquisition, Robinhood opened the day at $11.72. When news of FTX’s acquisition broke, initially investors expressed a positive reaction, and the price started to rise, but it soon dropped almost 20%.
Cryptomarkets across the globe experienced similar booms and busts, including Binance’s BNB, which went from around $320 to $400 before eventually dipping back below $310.
Read More: FTX Sam Bankman-Fried Net Worth Falls By 93%, Loses Billionaire Status
FTT (symbol: FTT) token fell by nearly 90% to $2.6 from $22 in some exchanges, as of now trading at just above the $5 mark, experts in crypto trading say it could fall further.
In July last year, Robinhood went public at $38 per share, raising nearly $2 billion. Its stock value is roughly 75% below its IPO price right now.
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