HOOD is currently trading below it’s cash on hand which sits at 10.6B according to @Kevin:
And HOOD is currently trading at a market cap of 7.94B:
It’s reasonable to assume that any offer would come in above cash on hand for them, in addition to this there is short interest on HOOD with a DTC figure greater than intraday:
So we’ve got the possibility of a confirmation of the buyout paired with potential for high sentiment. I’ve started a small call position farther out to see where it goes.
Depending on what shares outstanding data you use, their cash on hand/shares outstanding-anywhere from $12.16 to $14.52 (thanks to @MENoir for the math). That’s a big gap between the two, but point is the offer will be above current share price.
This is a $5 PT stock currently. Next earnings is around August 17th. It will probably be their 4th earnings miss on revenue/EPS. User base is down, inactive accounts are most likely increasing, and I can’t even imagine their losses on their crypto holdings currently.
We still have until July 29th for it to have been one year since HOOD’s IPO. If anything, I’d expect to hear about a share offering at their next earnings since it falls right after the one year period of their IPO. My thoughts on this are to help them raise more cash, and potentially keep the share price from cratering even more than it has.
I think it makes sense. Currently SBF’s billions are tied to FTX/Alameda Research, so his basically his whole net worth is very strongly correlated with BTC and crypto in general. I mean, I think thats the motive behind FTX acting as a backstop for so many failing crypto platforms (see BlockFi, Voyager, etc) to try to limit the “contagion” from hurting crypto more than it already has.
But I also think SBF might realize it could be a good idea to “diversify” his wealth beyond just crypto, which Robinhood would offer. He’s been critical of robinhood at times (in particular for their handling of the GME situation) and I could imagine him thinking that he could improve it operationally by utilizing FTX’s experience running a massive retail trading platform. I don’t think its “likely” that he makes an offer, but its definitely plausible.
But yeah, I have a few monthlies here that I may add to. Will definitely be keeping an eye on this, though I also wonder if SBF/FTX isnt already a bit preoccupied with the ongoing crypto winter to be looking for an acquisition like this.
