Sam Bankman-Fried's Stock to be Bought Back by Robinhood‍

In addition to announcing plans to repurchase shares once owned by Sam Bankman-Fried, Robinhood Markets Inc. also announced the cancellation of over $500 million in stock-based remuneration for its co-founders.

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As consumers reduced their trading, the online brokerage also recorded a larger-than-expected deficit for the fourth quarter, according to a statement released on Wednesday.

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Robinhood Chief Executive Officer Vlad Tenev stated in a statement, "Co-founder Baiju Bhatt and I confirmed recently that we canceled roughly $500 million of our share-based remuneration to guarantee the company has as many assets as possible to create value for users and shareholders. "A number of the services we introduced are already beginning to gain real traction, which gives us hope that they may develop into sizable industry sectors throughout the age."

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At 4:49 p.m., shares of the online brokerage increased 3.7% to $10.86 in extended trading. New York, where.

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The period's net loss came to $166 million, or 19 cents per share. That is higher than the average estimate of the analysts polled by Trade Algo, which was 11 cents. Revenue increased by 5% from the prior year to $380 million, falling shy of the $388.8 million target.

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Once a significant source of income, crypto transaction revenue started to fall by the end of 2022. The collapse of Bankman-FTX Fried's in November, formerly among the biggest cryptocurrency exchanges in the world, alarmed investors and contributed to a decline in the price of Bitcoin and other digital currencies. Despite adding new products like retirement accounts and cryptocurrency wallets, trading still accounts for almost half of Robinhood's revenue.

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The directors of the brokerage allowed the company to "pursue purchasing most or all" of the shares after a Bankman-Fried-controlled business acquired a stake of more than 7% in Robinhood last year, as stated in the announcement.

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The stake's future has remained uncertain. Recently, a Bankman-Fried company that bought the shares declared bankruptcy. The US Department of Justice, the insolvent cryptocurrency lender BlockFi Inc., and Bankman-Fried personally are squabbling for the shares.

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The price of Robinhood's shares, which increased 29% this year as of Wednesday's close in regular trading, has decreased by more than 70% ever since the company's July 2021 IPO.

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Robinhood has battled to regain traders' interest after a pandemic-driven boom released a stampede of established in the market into stocks, commodities, and virtual currencies. Revenue from cryptocurrency transactions fell 24% from the third quarter to the fourth, reaching $39 million.

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Despite the company's losses over the past two years totaling more than $4.5 billion, they have slowly declined since the third quarter of 2021, and the most recent quarter had Robinhood's smallest loss since being a publicly traded company. Over 1,000 staff were let off by the company the year before.

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A persistent danger to Robinhood's operations is a US regulatory attempt to alter the way trades from small investors are handled. A proposal from the Securities and Exchange Commission would modify the current arrangement in which large trading firms pay brokerages like Robinhood to carry out their clients' trades. A methodology that enables Robinhood to provide commission-free transactions could be completely changed, according to the company's leaders.