Robinhood will rebuy its shares which were purchased by FTX Co-Founders
Robinhood secured permission from the company board members to purchase the company’ 7.1% shares, which were purchased by FTX Co-Founders in 2022.
In May 2022, FTX co-founders Sam Bankman-Fried (SBF) & Gary Wang purchased 55 million Robinhood shares via a company Emergent Fidelity Technologies. Many FTX creditors filed motions in court to get ownership in this shareholding. The US prosecutors froze all these shares on behalf of the FTX bankruptcy lawyers and decided to unfreeze them until the completion of the FTX bankruptcy proceedings.
On 9 Feb 2023, Publicly listed crypto & stock trading platform Robinhood (HOOD) released its Q4 2022 earning report.
Robinhood’s financial officer confirmed that the company received authorization from the board to buy 55 million HOOD shares from Emergent Fidelity Technologies.
Jason Warnick, the chief financial officer at Robinhood, said:
“Our Board authorized us to pursue purchasing most or all of our shares that Emergent Fidelity Technologies bought in May 2022.”
Earlier this on 8 Feb 2023, Jason talked about this plan in an interview with CNBC. In the interview with CNBC, Jason said that the company was in talks with the US DOJ to buy frozen shares but what will happen in the future is still unclear.
FTX, Alameda Research & Loan game
To buy Robinhood shares, FTX co-founders SBF & Gary managed a loan from FTX’s sister company Alameda Research to Emergent Fidelity Technologies.
After the purchase of 55 million Robinhood shares, FTX co-founders collected a loan from the popular crypto lending platform BlockFi on behalf of 55 million HOODs as collateral.
In short, SBF & Gary Wang easily collected a very big amount of money with the help of loan game, without spending money.
After the bankruptcy of the FTX exchange, BlockFi also lost its financial position and later filed for bankruptcy under the chapter 11 code.
Read also: Coin Cloud files for bankruptcy under chapter 11 code
