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 acquisition of FTX by Binance and an influx of dire sentiment into the cryptocurrency market. The bankrupt FTX exchange likely 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 like Microstrategy (MSTR.US), Marathon Digital (MARA.US), and Coinbase ( COIN.US), which is down 5% today before the market opens.
- The FTX exchange as of yesterday held almost 56 million Robinhood shares, equivalent to a 7.61% stake in the company.
- It’s unclear if FTX has sold its holdings, but it’s possible it may eventually have to do so amid a liquidity crunch. The exchange has pledged to cover 1:1 of lost and suspended client funds.
- On the heels of the flurry of SEC filings, the market has recently begun to speculate that FTX owner Sam Bankman-Fried might 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 for 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 is trading around $9. Robinhood’s popularity peaked during the 2021 bull market, when a huge flow of cash from tax relief programs in the United States 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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