Robinhood Proposes Buying Back Shares Bought by Former FTX CEO SBFTheNewsCrypto
On Wednesday, Robinhood Markets announced that it will attempt to buy back shares. Acquired by former FTX CEO Sam Bankman-Fried, Whose 7.6% ownership in the firm is still a contentious aspect. In both Bankman-Fried’s criminal prosecution and the bankrupt exchange’s bankruptcy.
On an earnings discussion with investors and analysts. CEO Vlad Tenev noted that the acquisition will eliminate a potential source of distraction for the company’s shareholders. Furthermore, he continued by saying that the buy of 55 million shares had been green-lit by the company’s board of directors.
Following the news, shares of Robinhood rocketed, rising over 5% to about $11 in afterhours trading. Robinhood has not provided an estimated closing date for the deal, despite negotiating with the Department of Justice.
Multiple Claims Over $55M Shares
Robinhood shares was acquired by Bankman-Fried and Gary Wang, co-founder of FTX, via their holding firm Emergent Fidelity Technologies in May of last year. Bankman-Fried’s trading business, Alameda Research, financed Wang and him $546 million to buy the stock, according to court documents filed in December.
The United States Department of Justice (DOJ) said last month that it had seized the $450 million-worth of shares. But now bankrupt crypto lender BlockFi is also vying for ownership of the Robinhood stock, arguing that the stock was promised to it under an agreement from last year November.
Moreover, Sam Bankman-Fried’s legal team has recently filed a move to retain control of the shares, citing his need for the funds to retain competent counsel as the basis for their argument.