Shares of popular stock trading app Robinhood surged higher on Monday after reports that billionaire Sam Bankman-Fried’s cryptocurrency exchange, FTX, is considering a deal to buy the company just over a month after he first disclosed a stake.
One of the largest crypto trading exchanges in the world rivaling the likes of Coinbase and Binance, FTX is internally debating how to pursue a full acquisition of Robinhood, Bloomberg first reported on Monday, citing people familiar with the matter.
Shares of Robinhood spiked on the news, rising as much as 18% before getting halted for trading shortly at approximately 3:10 p.m. ET.
The stock held onto most of its gains after trading resumed at 3:15 p.m., still rising by roughly 15% on Monday.
Robinhood is yet to receive a formal takeover offer, while FTX has not made a final decision on whether to pursue the deal and could still opt out, according to Bloomberg.
The report comes just over a month after billionaire Sam Bankman-Fried, the founder and CEO of FTX, first disclosed a 7.6% stake in Robinhood worth roughly $650 million, according to regulatory filings.
Bankman-Fried at the time called Robinhood shares “an attractive investment, causing the stock to soar over 20% in a single day on May 14.
Shares of Robinhood have largely struggled amid the wider market selloff in the first half of 2022, falling over 50% compared to the S&P 500’s roughly 20% decline. Investors have soured on the stock as the company continues to struggle with depressed user growth on its platform as well as declining trading revenues. Robinhood shares now trade at nearly $10 per share, still a far cry from a record high of $85 per share last August.
Big Number: $20.6 Billion
That’s how much Bankman-Fried is worth, according to Forbes’ estimates. After launching FTX in 2019, he is now one of the richest people in crypto, with his company reaching a $40 billion valuation at the beginning of 2022.