News about FTX Cited as the reason for the drop.
The Robinhood stock took a dip this morning at around 20% to $9.74 after news of the recent acquisition of FTX by its rival Binance. FTX originally had a 7.6% stake in the trading platform that was purchased back in May. The value of the stock was at $11.72 before the news of the acquisition was made public.
According to an SEC filing, 56 million shares of Robinhood were purchased by FTX and some assumed Bankman-Fried intended to outright purchase Robinhood but that was later denied by Sam. The price of the token raised 14% at the time but recent sudden events have changed everything.
Robinhood attained its popularity as a stock trading platform during the pandemic as many were stuck at home with government stimulus money in their bank accounts. January 2021 saw Robinhood used by a large number of investors to fight off a short squeeze of Gamestop.
The retail stock trading app went public in July of 2021 at an initial offering of $38 per share. Since the launch and subsequent first quarter of 2022 the app has seen an 18% decline in revenue after 9% of its staff was laid off. The company has also been downgraded from “neutral” to “Sell” by Goldman Sachs before but has since come back to “neutral” since June of 2022.
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