FTX CEO Sam Bankman-Fried (SBF) refuted rumors that the crypto exchange was planning to acquire the trading platform, Robinhood. This is after Bloomberg News reported yesterday that FTX was in talks to buy Robinhood.
However, the FTX CEO today issued an emailed statement saying:
“We are excited about Robinhood’s business prospects and potential ways we could partner with them, and I have always been impressed by the business that Vlad and his team have built. That being said there are no active M&A conversations with Robinhood.”
It is possible that the rumors suggesting that discussions were underway on how FTX would buy the brokerage app were based on an earlier comment by Fried that Robinhood was “an attractive investment.”
Robinhood dual-class shareholder structure
Since Robinhood has a dual-class shareholder structure that gives its founders more power, it will be difficult for FTX to make a buy-out without the approval of the founders.
Robinhood CEO, Vlad Tenev and CCO Baiju Bhatt own about 8% of the trading platform and have 64% voting power of the company.
According to a filing with the US Securities and Exchange Commission (SEC) last month, Sam Bankman-Fried has purchased a 7.6% stake in Robinhood and regards Robinhood as an “attractive investment.”
However, Fried said that he has no intentions to influence or change Robinhood.
Robinhood revenue growth
Even though Robinhood offers limited assets on its trading platform, its revenue growth has been greatly influenced by the incomes from the crypto-related trading platform.
After joining the industry four years ago, Robinhood is currently trying to expand its crypto offering, where it launched a wallet functionality on its platform this year.