Robinhood Shares Explode 24% After CEO of Major Crypto Exchange takes Stake

There’s a good reason why shares of trading platform Robinhood were soaring on Friday.

The company’s shares jumped 24%, just one day after the CEO of a major crypto exchange took a stake in the retail investing app.

An entity called Emergent Fidelity Technologies took a 7.6% stake in Robinhood worth $648 million earlier this month, according to a document filed with the Securities and Exchange Commission.

The SEC document also showed Sam Bankman-Fried, who leads the Bahamas-based crypto company FTX, is the sole director and majority owner of Emergent.

The stake makes Emergent the third-largest Robinhood shareholder, according to FactSet data.

Bankman-Fried acquired the shares because they “represent an attractive investment,” according to the filing, which also says he “intends to hold the Shares as an investment” and doesn’t have “any intention of taking any action toward changing or influencing the control of the Issuer.”

He may “from time to time engage in discussions” with management, however.

“Of course we think it is an attractive investment too,” Robinhood’s communications team said in a tweet on Thursday.

Bankman-Fried can also review “options for enhancing stockholder value through, among other things, various strategic alternatives or operational or management initiatives,” according to the document. It also said he could acquire additional shares.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.