Robinhood Stock News and Forecast: HOOD soars 20% in premarket after Sam Bankman-Fried stake uncovered
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get Premium without limits for only $9.99 for the first month
Access all our articles, insights, and analysts.
UNLOCK OFFER- FTX founder Sam Bankman-Fried bought 7.6% of RobinHood.
- HOOD shares rallied more than 20% afterhours and in Friday's premarket.
- Robinhood stock is down 75% since its IPO.
Late on Thursday it came to light that crypto icon Sam Bankman-Fried (SBF) had acquired a 7.6% stake in Robinhood Markets (HOOD). HOOD shares rose more than 20% afterhours on Thursday and are up 20.6% in the premarket at the time of writing on Friday morning at $10.32. The trading platform that was the favourite of the retail crowd during the height of the pandemic bubble of the past two years went public in July 2021. Since then the stock has lost 75% of its value despite rallying more than 100% during its first month of trading.
Robinhood Stock News: SBF says HOOD stake only personal investment
Bankman-Fried was quick to say that his Robinhood stake was just a personal investment and not the start of a takeover attempt. Bankman-Fried spent $648 million to acquire the shares at an average price of $11.52, which means he has probably been adding to his stake for months as HOOD has traded near $8 of late. The vast majority was acquired at the Thursday close however. In total SBF owns about 56 million shares.
The investment is sizable as SBF's fortune is estimated at $21 billion but may be lower due to current crypto market mayhem. SBF founded Alameda Research and FTX, one of the world's largest crypto exchanges. Another interesting angle is that FTX is planning on releasing a stock trading platform that would compete with Robinhood, so we cannot help but take Bankman-Fried's statement with a grain of salt.
Robinhood has 21 TIMES the users FTX has. @SBF_FTX may be pulling an @elonmusk move buying 7.6% of $HOOD for about $11.52/share, bringing stocks/options to FTX (which they have been wanting). Robinhood has the platform & is near book value. Will @vladtenev get a buyout offer?
— Meet Kevin (@realMeetKevin) May 12, 2022
Robinhood has 21 TIMES the users FTX has. @SBF_FTX may be pulling an @elonmusk move buying 7.6% of $HOOD for about $11.52/share, bringing stocks/options to FTX (which they have been wanting). Robinhood has the platform & is near book value. Will @vladtenev get a buyout offer?
— Meet Kevin (@realMeetKevin) May 12, 2022
As the tweet above demonstrates, many observers are speculating that this large stake may lead to a buyout offer in the future. After all, SBF is worth somewhere around twice the value of HOOD's entire market cap. Despite being a favourite of growth stock guru Cathie Wood, or maybe because of, HOOD stock has dumped more than 55% this year as the pandemic's retail trading fury has given way to much lower trading volumes.
Robinhood Stock Forecast: HOOD must hold above $11 to make run at $14
SBF's giant block trade, which was rumoured to cost near $480 million, came as HOOD touched its all-time low on Thursday at $7.71. This is a far cry from its IPO at $38. To keep momentum, HOOD stock needs to surpass $10.92 in the regular session on Friday. This was the range high from May 4 and 5. If it cannot close above this level, then we are afraid that HOOD may fall back to new lows. Right now HOOD is trading just below here.
If it can surpass $10.92, this would set Robinhood stock up for a run at $14. That level has acted as overhead resistance since early February. The 50-day moving average at $11.55 may also offer resistance before bulls can make it to $14. The Relative Strength Index (RSI) reading of 35 does mean it is oversold enough that it may allow for a further rally, at least until the RSI moves above 50. There is too much reticence in the market, however, for any move toward overbought territory. Support is at $10.
HOOD daily chart
Like this article? Help us with some feedback by answering this survey:
- FTX founder Sam Bankman-Fried bought 7.6% of RobinHood.
- HOOD shares rallied more than 20% afterhours and in Friday's premarket.
- Robinhood stock is down 75% since its IPO.
Late on Thursday it came to light that crypto icon Sam Bankman-Fried (SBF) had acquired a 7.6% stake in Robinhood Markets (HOOD). HOOD shares rose more than 20% afterhours on Thursday and are up 20.6% in the premarket at the time of writing on Friday morning at $10.32. The trading platform that was the favourite of the retail crowd during the height of the pandemic bubble of the past two years went public in July 2021. Since then the stock has lost 75% of its value despite rallying more than 100% during its first month of trading.
Robinhood Stock News: SBF says HOOD stake only personal investment
Bankman-Fried was quick to say that his Robinhood stake was just a personal investment and not the start of a takeover attempt. Bankman-Fried spent $648 million to acquire the shares at an average price of $11.52, which means he has probably been adding to his stake for months as HOOD has traded near $8 of late. The vast majority was acquired at the Thursday close however. In total SBF owns about 56 million shares.
The investment is sizable as SBF's fortune is estimated at $21 billion but may be lower due to current crypto market mayhem. SBF founded Alameda Research and FTX, one of the world's largest crypto exchanges. Another interesting angle is that FTX is planning on releasing a stock trading platform that would compete with Robinhood, so we cannot help but take Bankman-Fried's statement with a grain of salt.
Robinhood has 21 TIMES the users FTX has. @SBF_FTX may be pulling an @elonmusk move buying 7.6% of $HOOD for about $11.52/share, bringing stocks/options to FTX (which they have been wanting). Robinhood has the platform & is near book value. Will @vladtenev get a buyout offer?
— Meet Kevin (@realMeetKevin) May 12, 2022
Robinhood has 21 TIMES the users FTX has. @SBF_FTX may be pulling an @elonmusk move buying 7.6% of $HOOD for about $11.52/share, bringing stocks/options to FTX (which they have been wanting). Robinhood has the platform & is near book value. Will @vladtenev get a buyout offer?
— Meet Kevin (@realMeetKevin) May 12, 2022
As the tweet above demonstrates, many observers are speculating that this large stake may lead to a buyout offer in the future. After all, SBF is worth somewhere around twice the value of HOOD's entire market cap. Despite being a favourite of growth stock guru Cathie Wood, or maybe because of, HOOD stock has dumped more than 55% this year as the pandemic's retail trading fury has given way to much lower trading volumes.
Robinhood Stock Forecast: HOOD must hold above $11 to make run at $14
SBF's giant block trade, which was rumoured to cost near $480 million, came as HOOD touched its all-time low on Thursday at $7.71. This is a far cry from its IPO at $38. To keep momentum, HOOD stock needs to surpass $10.92 in the regular session on Friday. This was the range high from May 4 and 5. If it cannot close above this level, then we are afraid that HOOD may fall back to new lows. Right now HOOD is trading just below here.
If it can surpass $10.92, this would set Robinhood stock up for a run at $14. That level has acted as overhead resistance since early February. The 50-day moving average at $11.55 may also offer resistance before bulls can make it to $14. The Relative Strength Index (RSI) reading of 35 does mean it is oversold enough that it may allow for a further rally, at least until the RSI moves above 50. There is too much reticence in the market, however, for any move toward overbought territory. Support is at $10.
HOOD daily chart
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.