FTX, one of the distinguished cryptocurrency exchange is said to eye the American retail trading platform, Robinhood (Nasdaq: HOOD), in terms to buy it. This is according to the report released by Bloomberg.
The intention is drawn to allow FTX to consolidate its position in the market and also integrate the services to a greater audience.
This came barely a month after a 7.6 percent stake was secured in Robinhood by FTX’s Founder and CEO, Sam Bankman-Fried. The CEO later declined the speculations aired insinuating his interest to control Robinhood.
However, Robinhood has not received a confrontation from FTX and suggests the process requires a series of closure formalities. The financial decision on the deal is as well not well aligned. Moreover, the thread signifies a clear discloser once the deal is signed and released to the public.
“We are excited about Robinhood’s business prospects and potential ways we could partner with them,” Bankman-Fried said in a statement sent to media houses. “That being said, there are no active M&A conversations with Robinhood.”
Since the last July firm’s initial public offering, Robinhood has lost almost three-quarters of its value. Bloomberg’s report on FTX’s intention to acquire Robinhood contributed to the stock surge after they triggered a trading pause, and gained 14% to close Monday at $9.12. The market capitalization of the crypto exchange rose to $8 billion.
Robinhood popularized commission-free trading targeting people with modest account balances. These are particular individuals who piled into financial markets during the early dates of Covid-19.
Investor enthusiasm for Meme stocks, such as GameStop Cor. and digital tokens as well as Dogecoin, fueled its popularity.
However, in recent days, the brokerage has been facing sharp struggles with continuous declines this year in equity and crypto markets. Monthly traders on the exchange have declined to 1.5 Million, from 17.7 million a year ago, in the first quarter of 2022.
Robinhood faced extreme liquidity difficulties during the GameStop rally in early 2021. This was according to the US House Committee report.