Robinhood's board of directors has approved a plan to buy back the $578 million stake in his company that was bought by former FTX CEO Sam Bankman-Fried and FTX co-founder Gary Wang last year.
Robin Hood confirmed won board approval to buy back the stake in its fourth-quarter report, which was published on February 8.
"We have been authorized by our Board to seek to purchase most or all of our shares that Emergent Fidelity Technologies purchased in May 2022," Robinhood CFO Jason Warnick said, adding
"The proposed stock purchase underscores the confidence the Board of Directors and management team have in our business."
The FTX co-founders bought 55 million shares of Robinhood, worth $578 million at current prices, in May through Emergent Fidelity Technologies for taking loans directly from FTX's sister firm, Alameda Research.
On January 9, the United States Department of Justice (DOJ) seized the 55 million shares โ which equates to around 7% of the company.
We have just announced our fourth quarter financial results. Find information about our performance in https://t.co/3l82Sx3F7d
โ Robinhood Communications (@RobinhoodComms) February 8, 2023
The assets were seized following a court filing by cryptocurrency lending platform BlockFi to reclaim the shares, as Bankman-Fried and Wang used the shares as collateral to obtain a loan from BlockFi.
Warnick told CNBC on February 8 that Robinhood has been working with the Justice Department on a plan to facilitate the buyback, but nothing has been finalized yet.
The actions in question have been the subject of more than one dispute.
December 23th, FTX asked the court to stop BlockFi to claim the shares of Robinhood, following the exchange collapse in November.
Meanwhile, while Emergent Fidelity did not file for Chapter 11 bankruptcy like FTX and other FTX-affiliated entities, the the company filed for bankruptcy on February 3.
Q4 crypto revenue falls
The United States-based trading platform saw revenue from cryptocurrency-based transactions from its โRobinhood Web3 Walletโ fall 24% quarter-on-quarter to $39 million in Q4. These the numbers also fell 12% in the third quarter.
Overall net income increased 5% to $380 million in the fourth quarter of 2022. However, the company reported an overall net loss of more than $1 billion in 2022.
Related: Robinhood Web3 Wallet Enters Beta, Uses Polygon as First Blockchain
The drop in cryptocurrency-related revenue comes despite the company managing to roll out Robinhood Web3 Wallet to more than 1 million waitlisted users during the quarter.
In just a few hours since the earnings report was released, Robinhood stock, marked HOOD, it is up 4.78%, according to Google Finance.
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