Robinhood shares pop more than 20% after Sam Bankman-Fried buys 7.6% stake

Sam Bankman-Fried, CEO of FTX US Derivatives, testifies during the House Agriculture Committee hearing titled Changing Market Roles: The FTX Proposal and Trends in New Clearinghouse Models, in Longworth Building on Thursday, May 12, 2022.

Sam Bankman-Fried, the CEO of FTX, has taken a 7.6% stake in Robinhood, according to a Thursday filing with the Securities and Exchange Commission.

The investing company's shares jumped at one point in extended trading before pulling back. They were up 25%.

The stock hit an all-time low in regular trading. The price at the end of the session was $8.56, which is close to the IPO price.

According to the document, Emergent Fidelity Technologies took a stake in the company. The majority owner is Bankman-Fried.

The document says that Bankman-Fried acquired the shares in the belief that they are an attractive investment. He may engage in discussions with management from time to time.

Of course we think it is an attractive investment as well, according to the communications team of the company.

If circumstances change, Bankman-Fried may review options for enhancing stockholder value through, among other things, various strategic alternatives or operational or management initiatives. He could acquire more shares.

FTX, where Bankman-Fried is CEO, is one of the largest exchanges in the world and offers derivatives products for more sophisticated traders as well as spot trading. FTX doesn't offer its services in the U.S., but it has become a competitor.

When it rolled out its trading platform in 2018, it was a huge success. The company's bottom line has become more important with the emergence of cryptocurrencies. In the fall, Robinhood revealed that it was testing a coin wallet and that it had over one million customers.