Fidelity's chief executive takes 7.6% stake in Robinhood

Fidelity's chief executive takes 7.6% stake in Robinhood

Samuel Bankman-Fried, the chief executive of FTX, has taken a 7.6% stake in Robinhood Markets Inc., worth $648.2 million.

A 13 D filed with the Securities and Exchange Commission Thursday, Bankman- Fried's firm Emergent Fidelity Technologies purchased shares of the commission-free trading platform from as low as $8.01 per share to as high as $13.85 per share. Bankman- Fried is the sole director and majority owner of Emergent.

Bankman-Fried purchased the stake because he believes that Robinhood is an attractive investment. He does not have any intention of taking any action toward changing or influencing the control of the company.

According to the filing, Bankman-Fried may engage with Robinhood's board and investors from time to time regarding its business, performance and investment returns. Bankman- Fried says that it is possible to review options for enhancing Robninhood's stockholder value through various strategic alternatives or operational or management initiatives, or acquiring additional shares.

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The company said that it is an attractive investment and that's why we think it's an attractive investment. After briefly hitting an all-time low Thursday, Robinhood shares soared during Friday's trading session.

In the first quarter of 2022, Robinhood posted a net loss of $392 million, or 45 cents per share, compared to $1.4 billion, or $6.26 per share a year ago.

The company's total net revenues fell 43% year-over-year to $299 million, while transaction-based revenue fell 48% year-over-year to $218 million. Options revenue fell 36% year-over-year to $127 million, equities revenue fell 73% year-over-year to $36 million and cryptocurrencies revenue fell 39% to $54 million.

There are 22.8 million funded accounts, including 7.1 million new accounts primarily driven by customer interest in cryptocurrencies. Its assets under custody increased 15% year-over-year, to 15.9 million monthly active users fell 10% year-over-year.

The company offers trading of 11 cryptocurrencies, including Bitcoin, Cash, Bitcoin, SV, Compound, Dogecoin, Ethereum, Classic, Litecoin, Polygon, Shiba Inu and Solana.

In the beginning of April, Robinhood rolled out a wallet to approximately 2 million customers on its waitlist, which has since been fully rolled out to all customers. The lightning network will be integrated with transaction fees of less than a penny, with the goal of integrating it with the lightning network for near instantaneous bitcoin transfers worldwide.

Robinhood expects full year 2022 operating expenses to increase by up to 5% year-over-year due to the cost reduction initiatives, including layoffs of approximately 9% of its workforce. It expects to incur a restructuring benefit of up to $19 million in the second quarter.