The competition for 55 million Robinhood shares continues.
Robinhood, a trading platform established in 2013 by Vladimir Tenev and Baiju Bhatt, is planning to buy back a $578 million stake in the company, previously purchased by Sam Bankman-Fried’s holding firm Emergent Fidelity Technologies.
According to Robinhood’s fourth quarter and full-year financial report shared on February 8th, the company has received the board of directors' approval to repurchase the stake.
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The Robinhood stakes have been quite a subject for the past few months. Almost 55 million Robinhood shares, around 7% of the company, were purchased in May by Emergent Fidelity Technologies. It appears that both FTX co-founders, Sam Bankman-Fried and Garry Wang, took out loans from Alameda Research to pay for Robinhood’s stake.
In November, FTX co-founder Sam Bankman-Fried allegedly pledged all 55 million Robinhood shares as collateral to take out loans from BlockFi.
At the end of November, in the wake of its own collapse, BlockFi filed a lawsuit against Emergent Fidelity Technologies seeking to obtain Robinhood’s shares. In December, FTX asked the court to prevent BlockFi from claiming rights to Robinhood’s stake.
After several court filings, the United States Department of Justice (DOJ) seized 55 million Robinhood stakes, claiming that DOJ is set to determine the rightful owner of these shares during “forfeiture proceedings.”
In the report, Robinhood Markets Chief Financial Officer (CFO), Jason Warnick, noted:
On the capital management front, our Board authorized us to pursue purchasing most or all of our shares that Emergent Fidelity Technologies bought in May 2022. The proposed share purchase underscores the confidence the Board of Directors and management team have in our business.
Based on some reports, Warnick allegedly claimed that Robinhood has been working hand in hand with the DOJ to create a plan and buy back Robinhood's stake. At the time of writing, no final decision has been made.
It is worth noting that almost all crypto firms in the Robinhood stake dispute, including BlockFi, FTX, and Emergent Fidelity Technologies, have filed for bankruptcy.
