Robinhood buys back Bankman-Fried stake in $605 million deal
Bankman-Fried’s Emergent bought a stake back in May 2022
mundissima/Shutterstock modified by Blockworks
Robinhood has officially entered into a share repurchase agreement to buy back $605 million worth of shares from Sam Bankman-Fried’s Emergent Fidelity Technologies.
The company filed an 8-K with the US Securities and Exchange Commission to announce the agreement, though it had previously disclosed its intent to buy back the shares earlier this year.
The share sale was approved by a New York court, with Robinhood buying back over 55 million shares from the United States Marshal Service, which acted on behalf of the government.
Each share was priced at $10.96.
“We are happy to have completed the purchase of these shares and look forward to executing on our growth plans on behalf of our customers and shareholders,” Robinhood chief financial officer Jason Warnick said.
Bankman-Fried’s Emergent Fidelity Technologies bought shares in May 2022. It filed for bankruptcy back in February.
Robinhood announced in its fourth-quarter earnings call back in February that its board of directors had authorized the company to “pursue purchasing most or all of the 55 million remaining Robinhood shares” bought by Emergent.
Robinhood also noted that it wasn’t sure when the share repurchase would take place, citing a “limited precedent” for the situation.
Prior to the share purchase agreement, multiple parties showed interest in the shares. Bankman-Fried even initially pushed to retain control of the shares, but officials seized the assets in January.
In December of last year, BlockFi sued Emergent for seeking control of the Robinhood shares, which it claimed were collateral after Alameda defaulted on loans.
“BlockFi is entitled to have all such collateral immediately surrendered to it and/or liquidated in whatever manner necessary to preserve as much value as possible with the proceeds from any and all such sales transferred to BlockFi,” BlockFi’s lawyers wrote at the time.
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