Financial services firm Robinhood recently announced that it intends to buy back around 55 million shares purchased by fallen crypto mogul Sam Bankman-Fried (SBF) in May of last year. SBF bought the said stake by way of Emergent Fidelity Technologies, a subsidiary of his crypto exchange FTX which filed for bankruptcy earlier this year.
Last month, Robinhood’s board of directors approved the plan to buy the stake originally acquired for SBF by Emergent Fidelity Technologies in response to shareholders’ concerns as to what would happen to the shares in the wake of FTX’s collapse.
As of mid-February, Robinhood executives were in discussions with the US Department of Justice as to how best to go about buying back the shares. However, neither party has given a concrete timeline for the said purchase.
According to a statement issued by the financial services company, it is impossible at this point to determine exactly when the buyback will take place as there have been limited precedents for such situations.
SBF controlled Emergent Fidelity in tandem with Gary Wang who co-founded FTX. Court documents show that the two of them took out a number of direct loans from Alameda Research to buy the said shares.
How Much of Robinhood Does SBF Currently Own?
According to the Justice Department’s January 20 filing, SBF is said to hold 55,273,469 shares in Robinhood, essentially more than 7% of the firm’s outstanding shares. In total, the aforementioned stake is worth more than $578 million.
That said, the aforementioned stake is actually the focal point of a dispute between SBF and several multinational entities that include cryptocurrency lender BlockFi.