Bloomberg News reported that FTX, one of the world’s largest crypto exchanges, was discussing the takeover in-house but hasn’t made an offer to Robinhood. That news caused the stock to climb, and trading was briefly halted.
Earlier this month, PYMNTS reported that Robinhood’s market value was fast fading as its cash and user base began to dwindle.
The company saw its share price fall more than 80% in mid-June, with losses exceeding $3 billion since Robinhood went public in July 2021.
Following May’s gloomy metrics, some analysts dropped their price targets on Robinhood’s stock this week, aligning with the overall market’s decline and the cryptocurrency market’s pandemonium, Bloomberg reported.
Atlantic Equities analyst John Heagerty lowered his price target to $5 a share a day after JPMorgan Chase analyst Ken Worthington cut his to $7, per Bloomberg.
In May, FTX CEO Sam Bankman-Fried purchased a 7.6% stake in Robinhood by purchasing more than 56 million shares in the company, a deal worth $482 million.
The news comes days after U.S. Rep. Maxine Waters, chair of the Committee on Financial Services, and Rep. Al Green, chair of the Subcommittee on Oversight and Investigations, released a report on the “meme stock” phenomenon — of which Robinhood was at the center — and its impact on the economy.
The “meme stocks” became popular last January, when numerous retail investors bought huge amounts of shares of GameStop, making things much more volatile for the institutional investors betting against the stocks.
Waters said she wanted to do a “deep dive” into the topic, and learned that Robinhood used “troubling” business practices and had a business culture that valued quick growth over stability.