According to a Thursday filing with U.S regulators, the CEO of crypto exchange FTX purchased a 7.6% stake at Robinhood Markets.
Samuel Bankman-Fried stated in the filing that he purchased the shares believing they would be a good investment. He also said that he does not currently intend to influence or change the control of Robinhood.
Robinhood gained fame thanks to its simple-to-use trading app. This app brought new investors to the stock exchange, most famously through the meme-stock frenzy which sent GameStop skyrocketing in the early part of last year. However, crypto has been a significant part of the company’s business.
Robinhood’s revenue from customers trading in cryptocurrencies accounted for about 25% of its first three months of 2018. Robinhood has been expanding its crypto business by rolling out crypto wallets to its customers and adding new coins for trading on its platform.
Bankman-Fried purchased shares from Emergent Fidelity Technologies between March 14 and Wednesday to build his stake in Robinhood. The stock’s value fell during that period, and it was only $85 at the end of its debut on Nasdaq in summer 2021.
Robinhood’s stock price has fallen as Robinhood’s growth has slowed. Analysts expected a bigger loss in the first quarter. According to the company, volatility in crypto and stock markets has kept casual investors away or made them less likely to make large trades.
Robinhood’s stock surged nearly 27% during after-hours trading on Thursday following the disclosure. The stock rose 5% during regular trading to close at $8.56.