Robinhood stock crash 📉 Does FTX still have a stake in the company?

Shares of Robinhood (HOOD.US), a company that offers a popular cryptocurrency trading platform, fell 20% yesterday and are trading lower today ahead of the open following the purchase of FTX by Binance and an influx of dire sentiment into the cryptocurrency market. The bankrupt FTX exchange probably still has a large stake in the company:

  • The failure of the FTX exchange has spread not only to the cryptocurrency industry, but also to Wall Street-linked companies such as Microstrategy (MSTR.US), Marathon Digital (MARA.US) and Coinbase (COIN.US), which are down. 5% today before the market opens.
  • The FTX exchange had almost 56 million Robinhood shares yesterday, corresponding to an ownership stake of 7.61% in the company.
  • It is unclear whether FTX has sold its holdings, but it is possible that it will eventually have to do so amid a liquidity crunch. The exchange has promised to cover lost and suspended customer funds 1:1.
  • On the heels of the wave of SEC filings, the market has recently begun to speculate that FTX owner Sam Bankman-Fried may acquire a majority stake in Robinhood. The company’s share price had reacted positively to these reports.
  • The news of the sale of FTX on the Binance exchange came as an obvious surprise to the stock.
  • Robinhood made its public debut in July 2021, selling shares in an initial public offering at a price of $38. Today the stock trades around $9. Robinhood’s popularity peaked during the bull market of 2021, when a huge influx of cash from US tax relief programs hit the stock and cryptocurrency markets. In recent weeks, Robinhood has reported nearly 9% job cuts.

Robinhood (HOOD.US), interval H1. The relative strength index approached 30 points, signaling an oversold situation. Source: xStation5

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