justin sullivan
Robinhood Actions (NASDAQ: BELL) increased almost 5% in after-close trading on Wednesday despite the lack of estimates on the top and bottom lines. Instead, merchants focused on an increase in average revenue per user and a second consecutive quarter of positive Adjusted EBITDA as retail broker expenses were down from the prior year.
With more than $6 billion on its balance sheet, Robinhood (HOOD) has also revealed that it is in talks with the Department of Justice to buy a 7.6% stake in the company from disgraced cryptocurrency mogul Sam Bankman-Fried. However, the plan is a bit tricky, as ownership of SBF has been disputed since its crypto empire imploded in November. Claims have been filed by units of FTX and bankrupt crypto lender BlockFi, which has said shares of Robinhood were pledged as collateral.
“We have been authorized by our board of directors to seek to purchase most or all of the shares of Robinhood that Emergent Fidelity Technologies purchased last May,” CEO Vlad Tenev stated on an earnings call (see full transcript here). “The board of directors and the management team have incredible confidence in the future of our business, so we believe that this buyback will be positive over time and eliminate the distraction for shareholders. Since there are not many precedents for situations like these We can’t predict how long this will take, but we’ll keep you posted as appropriate.”