Robinhood’s board has approved a proposal to buy back 55 million company shares acquired by SBF and Gary Wang last year.
In the quarterly report shared on Feb. 8, the company stated:
Robinhood Board of Directors authorizes, subject to final approval, Robinhood to pursue purchasing most or all of the 55 million remaining Robinhood shares that Emergent Fidelity Technologies Ltd. bought in May 2022.
In May 2022, the FTX co-founders bought 55 million Robinhood shares, worth $578 million, through Emergency Fidelity, borrowing directly from FTX’s sister firm Alameda Research. Since then, there has been quite a fight over the shares as several entities have claimed them, including FTX, Sam Bankman-Fried, and BlockFi.
Related: BlockFi sues SBF over Robinhood shares
Each entity shared its viewpoint on Robinhood shares. BlockFi indicated that the shares should be theirs as failed collateral. FTX replied that BlockFi is just one company in the long line of creditors asking for the money back, and that it should wait. For his part, Sam Bankman-Fried claimed the shares were bought legally and that he needed the money to pay his lawyers.
Related: Robinhood shares may move to neutral broker
But after the litigation, the Department of Justice (DOJ) seized the stock. Sam Bankman-Fried bought more than 56 million shares for $648 million. And now Robinhood is negotiating with the DOJ to facilitate the purchase.
Related: DOJ seises Robinhood shares
In the quarterly report, Robinhood said that the timeline for the transaction is unclear:
Since there is limited precedent for this type of situation, we cannot predict when, or if, the share purchase will take place. We will provide updates as appropriate.
Markets reacted positively to the news. According to Google Finance, HOOD rose 5% on Wednesday.
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