Robinhood Markets, Inc.’s logo is seen at an emerging event on Wall Street following the company’s IPO in New York City, USA, on July 29, 2021. REUTERS / Andrew Kelly
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June 27 (Reuters) – Sam Bankman-Fried’s FTX cryptocurrency said it is not in talks to acquire Robinhood Markets Inc (HOOD.O), after a report on Monday said the exchange was exploring the deal.
Bloomberg News reported Monday that FTX was internally discussing how to buy app-based brokerage and that Robinhood had not received a formal acquisition approach, citing people with knowledge of the matter.
“There are no active mergers and acquisitions talks with Robinhood,” Bankman-Fried said in an emailed statement. “We are excited about Robinhood’s business prospects and the potential ways we could partner with them.”
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Robinhood declined to comment. Shares of the retail platform fell 5% in extended trading after jumping above 14% in the report.
Last month, the founder and CEO of FTX revealed a 7.6% stake in Robinhood, but said he had no intention of taking control of the retail platform.
Robinhood’s dual-class shares give its founders control of 64% of outstanding voting shares, making acquisitions virtually impossible without their support. Read more
The popular trading platform has come under pressure this year as trading volumes ease from the frantic pace of 2021, when retail investors used it to inject money into shares of so-called meme stocks like GameStop (GME.N) and AMC Entertainment (AMC.N). ).
This slowdown, along with the sale of high-tech technology stocks, has caused a close to 50% drop in Robinhood shares this year. The company had a market valuation of nearly $ 7 billion at Friday’s closing price.
The US branch of FTX announced in May that it would launch a stock trading platform in late summer. Last week, it acquired partner Embedded Financial Technologies for an undisclosed amount, which would add custody, enforcement and clearing services to its stock trading platform.
FTX and its billionaire founder Bankman-Fried have rescued other players during the recent collapse of the crypto market. It provided crypto lender BlockFi with a $ 250 million revolving line of credit to help the company avoid a liquidity crisis.
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Report by Manya Saini in Bangalore, John McCrank and Krystal Hu in New York; Edited by Aditya Soni and Richard Chang
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