Sam Bankman-Fried’s Robinhood stake is tied up in FTX bankruptcy proceedings, CEO Tenev says

Finance

Robinhood Markets, Inc. CEO and co-founder Vlad Tenev and co-founder Baiju Bhatt pose with Robinhood signage on Wall Street after the company’s IPO in New York City, U.S., July 29, 2021.
Andrew Kelly | Reuters

Robinhood Markets CEO Vlad Tenev said Tuesday he’s unclear what Sam Bankman-Fried, the disgraced former CEO of FTX, is going to do with his 7.6% stake in his trading app.

“I’m not surprised that it’s one of the more valuable assets they have on on their balance sheet because it is public company’s stock,” Tenev said on CNBC’s “Squawk Box.” “We don’t have a lot of information that you guys don’t have. We’re just watching this unfold and … it’s going to be locked up in bankruptcy proceedings, most likely for some time. And so we’re just kind of seeing how that plays out.”

In May, Bankman-Fried took a 7.6% stake in Robinhood worth $648 million in the belief that the shares “represent an attractive investment.” As FTX spiraled into bankruptcy, Bankman-Fried’s Robinhood stake became the biggest liquid line item on his balance sheet that he could potentially sell.

Shares of Robinhood has fallen 45% this year to under $10 apiece amid shrinking revenue and declining users.

Tenev said he sees a pattern of foreign companies creating U.S. subsidiaries, which haven’t been scrutinized to the same degree. FTX became a Bahamas entity in July 2021.

“I think that’s something that regulators should take a look at and make sure that the scrutiny is the same if not higher, if you’re offshore and operating a business that has subsidiaries that serve American customers,” Tenev said.

The Robinhood CEO said he’s still bullish on cryptocurrencies despite the FTX collapse.

“We still see opportunities with crypto. I think in particular customers have been looking for regulated safer options, particularly customers in the U.S.,” Tenev said.

The trading app announced Tuesday it’s rolling out retirement accounts to its users, with a 1% contribution match.

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