- SBF and Gary Wang bought a stake in Robinhood via Emergent Fidelity.
- BlockFi asked the court, claiming the shares as FTX used them as collateral for a loan.
- FTX filed for chapter 11 bankruptcy, while Emergent Fidelity filed for bankruptcy protection on February 3, 2023.
The FTX-saga created some weird situations in the market. The contagion effect affected many players. Recently, the financial services company Robinhood’s board of directors approved buying back the stake worth $578 million. Ex-CEO Sam Bankman-Fried and ex-CTO Gary Wang bought it last year. The co-founders of the now bankrupt crypto exchange.
The Confirmation in the Q4 Report
Robinhood released its fourth quarter report on February 8, 2023. It confirms the approval from the board for buying back the stake. Company’s CFO Jason Warnick said:
“Our Board authorized us to pursue purchasing most or all of our shares that Emergent Fidelity Technologies bought in May 2022. The proposed share purchase underscores the confidence the Board of Directors and management team have in our business.”
The co-founders of FTX purchased 55 million shares in Robinhood stock, which are worth $578 million at the current price. The deal occurred in May 2022 via Emergent Fidelity Technologies, which directly took loans from Alameda Research, FTX’s sister firm. The United States Depart of Justice (DoJ) had already seized the 55 million shares, which are about 7% of the company as of January 9, 2023. The act was in the wake of an ongoing bankruptcy case and other allegations of wire fraud and conspiracy against FTX.
Source: https://www.thecoinrepublic.com/2023/02/09/robinhood-to-buyback-578-m-sam-bankman-frieds-stake-board/