Collateral

Robinhood Markets Inc Suffers Collateral Damage Following Binance Takeover of FTX

Shares of hybrid exchange Robinhood have fallen 25% since tensions erupted between Binance chief Changpeng ‘CZ’ Zhao and FTX chief and Robinhood lead investor Sam Bankman-Fried (SBF).

The nasty public spat between the two high-profile figureheads has culminated in Binance’s impending takeover of rival digital asset exchange in what has been one of the biggest upheavals in the industry since the collapse of Mt. Gox in 2015.

Until recently, SBF was an avid buyer of struggling crypto companies.

After Robinhood – a hybrid trading platform dealing with stocks as well as crypto – suffered losses of over $3.7 billion in 2021, SBF acquired a 7.5% stake in the company.

Now there are fears he may have to sell his stake as his personal wealth comes under pressure.

Previously worth more than $10 billion, SBF was removed from the Bloomberg Billionaires Indexsuggesting his personal wealth has plummeted by at least 90% in recent days.

Speculation of a major sell-off has clearly rattled the stock market, with HOOD falling more than 9% on Wednesday and more than 25% since last Friday.

Perhaps Robinhood long-term investor Cathie Wood of Ark Invest is ready to buy the dip in an over-the-counter deal.

Wood reduced Ark’s HOOD’s position by nearly 6%, or US$3 million, on Tuesday.

Year-to-date, Robinhood’s market capitalization has fallen 52% to less than $8 billion.