Robinhood’s board approved a plan to buy back $578 million in the company, which former FTX CEO Sam Bankman-Fried and FTX founder Gary Wang bought last year.
Robinhood confirmed in its fourth quarter report on February 8 that it had received board approval for the investment purchase.
In May, FTX founders through Emergent Fidelity Technologies bought 55 million Robinhood shares — $578 million at current prices — borrowing directly from FTX sister company Alameda Research.
On January 9, the US Department of Justice (DOJ) seized 55 million shares, equivalent to about 7 per cent of the company.
“Our Board authorized us to pursue purchasing most or all of our shares that Emergent Fidelity Technologies bought in May 2022,” said the chief financial officer of Robinhood, Jason Warnick.
“And that’s been a big question on shareholders’ minds, and a technical overhang, what’s going to happen with these shares” Warnick added.
“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. Stated by Warnick
“The board has authorized us to go and repurchase those and so we’re in discussions with the DOJ on that. Hard to tell exactly what the timeline is going to be, he added further.
“The proposed share purchase underscores the confidence the Board of Directors and management team have in our business.” Stated the company.