Robinhood, the popular online trading platform, has announced that its board of directors has approved a plan to buy back the $578 million stake in the company that was bought by former FTX CEO Sam Bankman-Fried and FTX co-founder Gary Wang last year.
The FTX co-founders bought 55 million shares of Robinhood stock in May 2022 through Emergent Fidelity Technologies, which was seized by the United States Department of Justice (DOJ) in January following a court filing from cryptocurrency lending platform BlockFi to reclaim the shares.
According to Robinhood’s chief financial officer, Jason Warnick, “The proposed share purchase underscores the confidence the Board of Directors and management team have in our business.” The company has been working with the DOJ on a plan to facilitate the buyback, but nothing has been finalized yet.
However, the company’s cryptocurrency-based transaction revenues from its “Robinhood Web3 Wallet” fell 24% quarter-on-quarter to $39 million in the fourth quarter, despite the firm managing to roll out the Robinhood Web3 Wallet to over 1 million users over the quarter. Overall, the company’s net revenues increased by 5% to $380 million in the fourth quarter, but reported an overall net loss of over $1 billion in 2022.
Despite the fall in crypto-related revenue and the overall net loss, Robinhood’s stock, tickered HOOD, has risen 4.78% in just a few hours since the earnings report was released. This buyback proposal reflects the confidence the company has in its business and is a positive sign for investors.
Read more:
- BlockFi Sued Sam Bankman-Fried Over Shares In Robinhood
- BlockFi Will File For Chapter 11 Bankruptcy With $10 Billion In Estimated Assets And Liabilities