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Robinhood (HOOD) stock jumps 40% on news of crypto exchange FTX CEO's 7.6% stake

Robinhood is no stranger to getting bailed out by billionaires, and FTX CEO Sam Bankman-Fried is betting on the app to turn things around.

Asif Khan
Asif Khan
9

Robinhood's stock has been in the dumps for most of 2022, but the stock jumped over 40% in after-hours trading on news that crypto exchange FTX CEO Sam Bankman-Fried has taken a 7.6% stake in the downtrodden investing app.

The 15 minute bar chart shows the violent move to the upside in shares of Robinhood (HOOD) in the after-hours session.
The 15-minute bar chart shows the violent move to the upside in shares of Robinhood (HOOD) in the after-hours session.

Some Twitter accounts who post in all caps initially falsely reported that mutual fund juggernaut Fidelity was the company investing in Robinhood, but I was able to refute that claim by actually reading the 13D filing with the SEC. What a concept, I know. The confusion likely came from the filing with the company name "Emergent Fidelity Technologies Ltd." For a jaboofer that tweets in all caps, it is an easy mistake to make, because it requires reading before tweeting out nonsense.

Screenshot of a deleted @unusualwhales tweet claiming Fidelity had taken a stake in Robinhood.
Screenshot of a deleted @unusualwhales tweet claiming Fidelity had taken a stake in Robinhood.

Robinhood's stock has been in the dumps for the past few months, and things got materially worse when the company reported absolutely atrocious Q1 2022 earnings results. Even after today's after-hours pop, HOOD shares are down over 87% from the high set last year. It seems that FTX CEO Sam Bankman-Fried is trying to bottom pick Robinhood's stock, and his sizable $56 million bet is certainly a vote of confidence. With volatility crippling many crypto exchanges this week, perhaps this is a move to diversify to another sinking ship? We will just have to wait and see if investing in Robinhood is dumber than running a crypto exchange.

This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.

CEO/EIC/EIEIO
CEO/EIC/EIEIO

Asif Khan is the CEO, EIC, and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

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