The shares of assets brokerage Robinhood (NASDAQ:HOOD) are soaring 22% today after the founder and CEO of a huge crypto exchange bought a large amount of HOOD stock.
The founder and CEO of FTX, Sam Bankman-Fried, obtained 7.6% of Robinhood’s shares for roughly $648 million, according to a filing with the U.S. Securities and Exchange Commission (SEC).
According to the filing, Bankman-Fried, a 30-year old billionaire, believes that HOOD stock is “an attractive investment.”
Sam Bankman-Fried Buys the Dip in HOOD Stock
In the filing, Bankman-Fried noted that may consider boosting the value of HOOD stock by “among other things, various strategic alternatives or operational or management initiatives.” This could include buying more shares.
However, at this time he has no interest in trying to acquire Robinhood.
For 2021, Robinhood reported a net loss of $3.7 billion, although its user base soared 81% last year to 22.7 million. But last quarter, the company’s sales tumbled 43% year over year.
On May 12, Citi estimated that the brokerage app could potentially be acquired for $15 per share. The firm, however, cut its price target on HOOD stock to $13 from $24. Despite today’s rally, shares have tumbled over 40% so far this year and 20% in the last three months.
On the date of publication, Larry Ramer did not hold any position (either directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.