Stock and crypto-trading platform Robinhood Markets Inc. on Wednesday said its board had cleared the company to pursue buying shares owned by Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX that collapsed last year. Bankman-Fried has a stake of more than 7% in Robinhood
HOOD,
-0.76%,
or more than 50 million shares, through Emergent Fidelity Technologies. Analysts have raised questions about the timing of the liquidation of that stake, as Bankman-Fried contends with a variety of fraud charges following FTX’s implosion.
“We think this repurchase will be accretive over time and removes a distraction for shareholders,” Robinhood Chief Executive Vlad Tenev said during the company’s earnings call. “Since there isn’t much precedent for situations like these, we can’t predict how long this will take.” Prior to the call, Jason Warnick, Robinhood’s chief financial officer, said in Robinhood’s earnings release that “our Board authorized us to pursue purchasing most or all of our shares that Emergent Fidelity Technologies bought in May 2022. The proposed share purchase underscores the confidence the Board of Directors and management team have in our business.” Shares of Robinhood rose 4.1% in after-hours trading on Wednesday. Robinhood also reported four …