Robinhood Markets
has cleared an overhang for its stock after buying back shares in the company once owned by Sam Bankman-Fried, the former CEO of collapsed cryptocurrency exchange FTX who faces a litany of criminal charges.
Robinhood
(ticker: HOOD) stock rose 3.2% in premarket trading on Friday after the retail-focused broker detailed in a filing that it had on Thursday completed a share purchase agreement with the U.S. Marshall Service. Robinhood said it had bought more than 55 million shares of its own stock from the agency for some $605 million.
The ownership stake—a sizable chunk of the company, which has a market capitalization just shy of $10 billion—was once owned by entities controlled by Bankman-Fried. The future of the shares, including whether or not they would be sold as part of FTX’s bankruptcy process, had been an overhang on Robinhood stock.
Bankman-Fried bought a 7.5% stake in Robinhood in May 2022, when his empire was intact and he was still seen as the industry’s golden boy and even a potential majority owner of Robinhood. Six months later, FTX—once valued at $32 billion—plunged into bankruptcy, with billions of dollars in customer funds missing and Bankman-Fried arrested on charges of fraud. He has pleaded not guilty.
Write to Jack Denton at [email protected]
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