Robinhood's Share Buyback

Martin Walker
Sep 2, 2023 at 02:34 pm

Robinhood, the cryptocurrency and stock trading platform, recently completed a substantial share buyback, involving a nine-figure sum, targeting shares owned by former FTX executives, notably Sam Bankman-Fried and Gary Wang, who had faced disgrace. This strategic move secured a total of 55,273,469 HOOD shares with an approximate value of $605.7 million.

To execute this transaction, Robinhood entered into a purchase agreement with the United States Marshal Service (USMS) on August 30 and successfully closed the deal on the following day. The agreement, as detailed in its Form 8-K filing on Thursday, clarified that the company used available corporate funds from its balance sheet to finance this share acquisition.

This initiative was previously approved by Robinhood's Board of Directors on February 8, 2023. Prior to this decision, Sam Bankman-Fried and Gary Wang had held these shares through Emergent Fidelity Technologies, Bankman-Fried's hedge fund, which had declared bankruptcy at that time.

Interestingly, in January, the government had seized approximately $700 million worth of assets belonging to Sam Bankman-Fried, including HOOD shares valued at $455 million, despite legal efforts to prevent their confiscation. Prosecutors alleged that these shares were acquired using embezzled funds from former FTX customers.

It's noteworthy that Robinhood was able to acquire these shares at an average purchase price of $10.96, which is below the current market trading value of $11.18 per share.

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