The vegan crypto billionaire Sam Bankman-Fried founded the crypto broker FTX in April 2019 and has since been on an aggressive acquisition trip around the world. FTX acquired the CySEC-regulated K-DNA Financial Services Ltd and the ASIC-regulated Australian ITFS Markets Pty Ltd in March 2022. A few weeks ago, WSJ reported a $648 million investment in Robinhood in exchange for 7.6% of the company’s shares. In recent weeks, the FTX founder has also stepped up as a financier in Elon Musk‘s Twitter acquisition. He is a busy guy!
Like FTX, Robinhood has risen to fame during the crypto hype since 2020. In 2021, Robinhood booked nearly $145 million in revenue tied to dogecoin trading in last year’s second quarter, roughly 25% of its total revenue that period and more than what it made from stock trading. By last summer, it boasted more than 22 million funded customer accounts and did an IPO. Times have changed for the worse, however. Its monthly active users fell 10% to 15.9 million in March, from 17.7 million in the same month of 2021. Robinhood laid off 9% of its employees late last month, while revenue fell 47%. The Robinhood stock this week fell to a record low and is trading 81% below its July IPO price.
Sam Bankman-Fried said the Robinhood investment was mostly driven by the stock’s depressed valuation and his expectations that the company could rebound. “There is a really plausible world in which it has a huge comeback,” he said. Not surprisingly, Bankman-Fried also said FTX would be open to partnerships with Robinhood; FTX has been adding stock-trading capabilities to its popular app, and Robinhood has been expanding its crypto offerings.
