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.
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.
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.