Breaking: Robinhood Buys Back $605.7 Million Stake from Sam Bankman-Fried in U.S. Government Deal

Robinhood Markets Inc. has finalized a share repurchase settlement price $605.7 million with america Marshal Service, in keeping with an organization announcement made earlier immediately and CNBC report. The deal includes the acquisition of 55.3 million shares at $10.96 every, beforehand owned by Sam Bankman-Fried’s Emergent Constancy Applied sciences. The transaction has acquired approval from the U.S. District Court docket for the Southern District of New York

Monetary Implications

The $605.7 million deal represents a major monetary transfer for Robinhood, which had initially disclosed its intention to repurchase the stake in February of this 12 months. The corporate’s board had licensed the pursuit of buying most or the entire inventory at the moment.

Market Response

Following the announcement, Robinhood’s inventory (HOOD) skilled a 3.31% improve, closing at +0.36. This implies that the market has largely responded positively to the information, though it stays to be seen how it will have an effect on the corporate’s long-term valuation.

Authorized Context

The approval from the U.S. District Court docket for the Southern District of New York provides a layer of authorized validation to the transaction. It additionally closes a chapter on the involvement of Bankman-Fried’s Emergent Constancy Applied sciences with Robinhood, following the previous’s chapter safety submitting final 12 months.

Background

In Could 2022, Bankman-Fried had acquired a 7.6% stake in Robinhood, amounting to over 56 million shares valued at almost $482 million.

In keeping with a Reuters report dated January 4, 2023, U.S. officers have been within the strategy of seizing greater than $400 million price of Robinhood shares linked to FTX.

Then the shares in query have been seized and transferred to the U.S. authorities’s custody following the chapter safety submitting by Bankman-Fried’s FTX and Emergent Constancy Applied sciences final 12 months.

Robinhood’s board had accredited a plan to repurchase the stake, as confirmed of their fourth-quarter report printed on February 8, 2023.

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