Robinhood, the popular online trading platform, has announced that it has bought back 55.3 million shares of its own stock from the US government for $605.7 million.
The shares were previously owned by Sam Bankman-Fried, the founder of the famous crypto exchange FTX and Emergent Fidelity Technologies, who filed for bankruptcy protection last year.
Bankman-Fried had acquired a 7.6% stake in Robinhood in 2022, but his assets were seized and transferred to the custody of the US Marshal Service after his companies collapsed due to fraud and regulatory issues. He is currently facing multiple charges, including illegal financial dealings with Chinese officials.
The Community Had a Positive Reaction to the News
Robinhood said that it had received approval from the US District Court for the Southern District of New York to repurchase the shares, which were priced at $10.96 each. The company said that its board had authorized the move to regain control over its shares and reduce its exposure to legal risks.
The news was well received by investors, as Robinhood’s stock rose by 3% in premarket trading. The company has been recovering from a series of controversies and lawsuits related to its handling of the GameStop saga and its IPO earlier this year.
Robinhood also said that it was open to collaborating with Bankman-Fried in the future, despite his legal troubles. Bankman-Fried had expressed a positive outlook on potential partnerships between his entities and Robinhood in an interview with Reuters last November.
However, Bankman-Fried’s defense team is facing a challenge from the DOJ, which is seeking to exclude seven of his expert witnesses from testifying at his trial. The DOJ argues that these witnesses would offer misleading or irrelevant opinions that would confuse the jury.
Bankman-Fried is scheduled to appear in court on October 2, where he will try to prove his innocence and avoid a lengthy prison sentence.
