After the halt, Robinhood shares jump 14% on FTX’s purchase rumor

  • June 28, 2022

A month after the CEO of FTX acknowledged owning a stake at Robinhood, rumors have immerged of FTX planning to purchase Robinhood. The rumors initially caused trading of Robinhood shares (NASDAQ: HOOD) to be halted for a few minutes.

However, after the resumption of trading, the Robinhood shares have spiked by more than 14%.

At the time of writing, the Robinhood stock was trading at $9.12 after a +1.12 (14.00%) hike.

FTX’s Robinhood takeover rumor

Robinhood, a US-based mobile-friendly stock and crypto brokerage firm, has been growing rapidly since it was established in 2013. The Robinhood trading platform currently has over 17 million active users and its stock already debuted on the NASDAQ stock market in 2021.

Robinhood added cryptocurrency trading in 2018 and currently allows users to trade over 11 cryptocurrencies including Dogecoin (DOGE) and Shiba Inu (SHIB).

However, at the moment, only users from the United States and the United Kingdom are able to trade on Robinhood. Robinhood is licensed in 27 states in the US and it is a member of the Financial Industry Regulatory Authority (FINRA). It is also overseen by the SEC since it is a publicly-traded business.

Following Robinhood’s success at a time when the cryptocurrency market has been experiencing winter, rumors have immerged that FTX, one of the leading crypto exchanges, is planning to buy it.

Shares of $HOOD resumed trading after a halt due to news that #crypto executive Sam Bankman-Fried’s FTX platform is looking into an #acquisition deal. #Robinhood Markets #stock has fallen nearly 90% from its 52-week high.

— Yahoo Finance Plus (@yfinanceplus) June 27, 2022

However, the FTX CEO, Bankman-Fried, today sent an emailed statement denying the rumors.

According to the statement, the CEO said:

“There are no active M&A conversations with Robinhood. We are excited about Robinhood’s business prospects and potential ways we could partner with them.”

The rumors could be fuelled by Fried’s statement in May when he called Robinhood shares “an attractive investment.”

Goldman Sachs revised Robinhood shares to neutral

On Monday, Goldman Sachs revised its rating of Robinhood stock from a sell to neutral in a report that downgraded the Coinbase stock.

Following FTX purchase rumors, FTX CEO had reached out to Bloomberg via a statement saying while the exchange would be interested in purchasing Robinhood, there are no active merger discussions yet.

FTX has been offering bailouts to crypto firs affected by the recent market price plunge with the most recent being the $250 million bailout of the Bitcoin lender BlockFi and the purchase of Canadian cryptocurrency exchange Bitvo.

The post After the halt, Robinhood shares jump 14% on FTX’s purchase rumor appeared first on Invezz.