NewsletterRobinhood Board Approves Buying Sam Bankman-Fried’s Stake From US DOJ
Robinhood’s board of directors has approved a plan to buy back former FTX CEO Sam Bankman-Fried’s 55 million shares, worth 7.6% stake in Robinhood. The brokerage firm is in discussion with the U.S. Department of Justice (DOJ) to purchase the seized shares that SBF acquired in May 2022 through his company Emergent Fidelity Technologies.
Robinhood to Buy Back Sam Bankman-Fried’s 7.6% Stake
In the Q4 financial report, Robinhood disclosed receiving approval from its board of directors to pursue purchasing 55 million Robinhood shares that were acquired by Sam Bankman-Fried through his Emergent Fidelity Technologies in May 2022.
The U.S. DOJ seized contested shares on January 9 as SBF’s Emergent Fidelity Technologies took loans from FTX’s sister firm Alameda Research to buy a 7.6% stake in Robinhood. Several parties including FTX, crypto lender BlockFi, and Sam Bankman-Fried have contested claims over the shares.
During the quarterly earning, Jason Warnick, Chief Financial Officer of Robinhood Markets, asserts that the proposed share purchase underscores the confidence the Board of Directors and management team have in business.
Vlad Tenev, CEO and Co-Founder of Robinhood Markets, said:
“We believe it will be accretive over time and removes a distraction for shareholders. We’re now starting to see meaningful traction on a number of the products we launched, which gives us confidence they can grow into significant business lines over time”
Robinhood will purchase shares at market price, but nothing has been finalized on when, or if, the share purchase will take place.
Robinhood Q4 Results
Total net revenues of Robinhood increased 5% sequentially to $380 million in the fourth quarter. Net loss was $166 million, as compared with net loss of $175 million in the third quarter of 2022. Thus, the loss has narrowed for the firm.
Robinhood share price fell nearly 1% to $10.47 after market close on Wednesday. The HOOD shares price are trading at nearly 5% higher at 10.97 during pre-market hours.
Also Read: Coinbase CEO Says SEC Could Possibly Ban Crypto Staking
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