A Securities and Exchange Commission (SEC) filing revealed that Sam Bankman-Fried is acquiring a 7.6 percent stake in Robinhood.
According to the paper, Emergent Fidelity Technologies invested $648 million in Robinhood. Bankman-Fried is the sole director and majority owner, it says.
Sam Bankman-Fried becomes third-largest Robinhood shareholder
He acquired roughly 56 million Robinhood shares “in the belief that the Shares represent an attractive investment.”
“The Reporting Persons intend to hold the Shares as an investment, and do not currently have any intention of taking any action toward changing or influencing the control of the Issuer,” the filing says.
Sam Bankman-Fried is now the third-largest Robinhood shareholder, according to Bloomberg data.
Robinhood stock jumps
Robinhood stock rose by 29% in extended trading after the news. The platform’s shares hit a 52-week low of $7.71 on Thursday before closing at $8.56.
It started letting retail investors invest in stocks, but in 2018 it launched a crypto trading platform, which proved a success. Since then, cryptocurrency trading has proven crucial to the company’s success. In the fall, Robinhood announced that it was beta-testing a cryptocurrency wallet, with a 1 million-strong waitlist.
Pulling an ‘Elon Musk’
Bankman-Fried’s move is reminiscent of one pulled off by Elon Musk, who is not on his way to becoming Twitter’s new overlord.
Meanwhile, Musk’s pursuit of Twitter has advanced at breakneck speed. He ranked the firm’s top shareholder with a 9.2 percent stake, revealed in early April.
He was then invited to join Twitter’s board but declined before making a surprise bid for the company on 14 April, claiming he intended to “unlock” its potential as a stronghold of free speech.
Twitter attempted to deter his bid by threatening to dilute the shareholdings of anyone who purchased more than a 15% stake in the company. However, its position evolved after Musk released additional financial details about his prospective bid.
He has secured $25.5 billion in funding and will take a $21 billion stake in the company. The board unanimously approved the offer, which shareholders will vote upon.