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Robinhood Erases Gains As FTX Denies "Active" Acquisition Rumors

Tyler Durden's Photo
by Tyler Durden
Monday, Jun 27, 2022 - 08:44 PM

Update (1640ET): Crypto exchange FTX has denied a report by Bloomberg of an interest in acquiring Robinhood.

A spokesperson for the company told Blockworks “there are no active M&A conversations” with the retail-focused brokerage that predominantly trades equities and options — in addition to a relatively smaller crypto business.

“We are excited about Robinhood’s business prospects and potential ways we could partner with them, and I have always been impressed by the business that Vlad and his team have built,” the spokesperson said in a statement.

“That being said there are no active M&A conversations with Robinhood.”

Of coursze that is not a denial of interest internally, it is a denial of an active discussion, but that was enough to erase most of HOOD's spike gains...

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Robinhood shares have popped more than 10% during intraday trading on Monday after Bloomberg announced that FTX's Sam Bankman-Fried, who is already an investor in the company, was seeking a path to acquire the struggling brokerage. 

Bloomberg reported late in the day on Monday that FTX was "exploring whether it might be able to acquire Robinhood Markets Inc," citing people familiar with the matter. FTX is said to be "deliberating internally how to buy the app-based brokerage".

Robinhood has said that it has not received a formal takeover approach and Sam Bankman-Fried was mum on the idea of a takeover when emailed on Monday, according to Bloomberg. 

The crypto billionaire told Bloomberg: “We are excited about Robinhood’s business prospects and potential ways we could partner with them. That being said, there are no active M&A conversations with Robinhood.”

Robinhood spiked 25% back in May when Bankman-Fried first announced his 7.6% stake in the company, which we detailed here

In the 'Purpose of Transaction' boiler plate from SBF's original 13D, the text read: "the Reporting Persons may from time to time engage in discussions as a stockholder with representatives of the Issuer, other stockholders of the Issuer or third parties regarding the performance of the Issuer and its business and investment returns."

The buy made Bankman-Fried the 3rd largest holder of HOOD (behind IA Capital Advisors 9.72% and Galileo PTC Ltd 7.81%) and ahead of Cathie Wood's ARK with 4.08%.

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