The cryptocurrency business Robinhood plans to buy about 55 million shares in the company owned by FTX founder Sam Bankman-Fried. The value of these shares is approximately $578 million.
According to the report for the company’s fourth quarter, Robinhood has been given permission by the company’s Board of Directors to investigate the possibility of buying the majority or all of the shares that Emergent Fidelity Technologies Ltd. purchased in May 2022.
“we expect that this buyback will be accretive over time and eliminate a distraction for shareholders,” said Vlad Tenev, the CEO of Robinhood. He said that the corporation has a healthy balance sheet with more than six billion dollars in cash reserves.
According to what Robinhood had to say about the matter, “The proposed share purchase shows the trust that the Board of Directors and management team have in our company.”
The Chief Financial Officer of Robinhood, Jason Warnick, made the following statement: “The board has allowed us to go and buy them, and so at this time we are in conversations with the DOJ on that.” It is difficult to speculate on what precisely the schedule will include.
We are unable to provide an accurate prediction on the timing or occurrence of the share purchase since there are few examples of situations similar to the one at hand. In the earnings release, it was stated that “we will give updates as necessary.”
It is believed by the Department of Justice in the United States that the 56 million Robinhood shares associated to Sam Bankman-Fried, often known as SBF, do not belong to the estate of the bankrupt individual.
The assets worth $700 million that belonging to FTX and Sam Bankman-Fried were confiscated by federal authorities in the United States one month ago. Shares in Robinhood, $100 million held at Silvergate Bank, $49.9 million held at Farmington State Bank, and $20.7 million held at ED&F Man Capital Markets are among the assets that have been confiscated.
Gary Wang, who had previously worked at SBF and FTX, used promissory notes to get financing from Alameda Research in order to purchase Robinhood shares. A few days ago, the company that controls the shares, Emergent Fidelity Technologies, filed for bankruptcy under Chapter 11 of the United States Code.
In November 2022, BlockFi filed a lawsuit against Emergent in order to retrieve the Robinhood shares that SBF was believed to have promised to the business as collateral. SBF then made an effort to keep hold of the Robinhood shares by arguing that he would be unable to access this property if it were to be alienated from Emergent and that part of these money were required to pay for his legal defense. SBF’s attempt was unsuccessful.
Compiled by Coinbold