Robinhood (NASDAQ:HOOD) never stays out of the headlines long. This week in particular is a busy one for the e-trading platform. From details surrounding its in-house meme stocks report to its new crypto listing, investors are never short on reasons to be bullish or bearish. The latest HOOD stock news pertains to a rumor that crypto exchange FTX is looking to buy the e-trading giant.
As InvestorPlace’s Eddie Pan reported yesterday, investors were sounding the alarm at the possibility of an acquisition. FTX, a crypto exchange founded by billionaire Sam Bankman-Fried, was rumored to be gearing up to buy Robinhood. These rumors sprang up as Bankman-Fried made a hefty investment into HOOD stock.
Purchasing over 56 million shares of HOOD, Bankman-Fried now enjoys a 7.6% stake in the e-trading company. Moreover, Bankman-Fried is an active holder of the stock, able to leverage his large position to help steer decision making at Robinhood.
The purchase comes during FTX’s push to enter the traditional stock market in a more meaningful capacity. Indeed, the crypto exchange has been trying to offer stock trading in some way or another for the last year. In June of 2021, FTX rolled out tokenized stock trading, allowing users to buy pieces of stocks without having to use an e-trader. FTX holds all of the underlying shares in its own reserve to fuel this service.
In May, FTX took its plan a step further, rolling out commission-free stock trading to select users. The company is planning on fully rolling out the service at some point in 2022, allowing all users the opportunity to purchase both stocks and exchange-traded funds (ETFs) on-platform. The launch will make FTX one of the only platforms to allow both stock and crypto trading; coincidentally, Robinhood is the only other company with such services.
HOOD Stock News: FTX Denies Plans to Purchase Robinhood
Robinhood investors have perked up at the idea of FTX buying out the company. It could be an exciting shake-up for Bankman-Fried to involve himself more in Robinhood’s goings-on, and merging companies of such magnitude could drive further innovation in the e-investing space. Unfortunately for holders, though, the HOOD stock news today suggests the acquisition won’t be happening.
Sam Bankman-Fried is coming out to dispel the rumors. Indeed, the entrepreneur says that a Robinhood acquisition is not something FTX is actively pursuing. It seems that he is quite happy with his 7.6% stake.
That isn’t to say FTX isn’t looking for a different acquisition target. Indeed, the company is reportedly in talks to acquire a part of crypto financial services company BlockFi. Last week, FTX extended a $250 million line of emergency credit to the company to help it tend its balance sheet. Now, it seems the two could take the relationship a step further. So, while Robinhood might be out of the question, there’s still much to be excited about for FTX fans.
After falling on the news that FTX wouldn’t be acquiring it, HOOD stock is trading down by about 2% today.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions 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.
