Robinhood, announced Thursday it had entered into a deal to purchase Bitstamp.
The deal stipulates that Robinhood will pay $200,000,000 in cash, and receive the benefit of international expansion. This deal will not close before the first half 2025.
When analyzing this transaction and its implications for publicly-traded Robinhood, there are two things to consider.
Although the shares jumped after the announcement, analysts like JMP’s Devin Ryan have not increased their target prices or weightings on the company’s stock.
Ryan’s Team reiterated its $30 price target on the stock and their outperform rating.
“We believe owning the exchange will provide opportunities for the firm to more deeply connect into the ecosystem (e.g., trading, staking, tokenization, payments, remittance, wallet integration), and perhaps over the longer term play an even bigger role in the tokenization of assets and securities, which we believe could be quite interesting. We also see opportunities to drive more activity and better economics with existing Robinhood retail customers through the exchange,” The analysts wrote.
Robinhood launched Solana stakes in the EU this year, after its debut only last December. In February the company teased its plans to build out this customer base.
Ryan’s team believes, however, that HOOD may also be able open its doors more to institutional clients as a result of the acquisition. CoinMarketCap ranks Bitstamp 16th among the top spot crypto exchanges.
This means the company won’t need to seek its own licensing in different jurisdictions.
“Through this strategic combination, we are better positioned to expand our footprint outside of the US and welcome institutional customers to Robinhood,” Johann Kerbrat said, “General Manager of Robinhood Crypto” Johann Kerbrat.
It will take time to see these financial benefits. JMP estimates that revenues will be between $ and $0. “ballpark of $100 [million]” This is based upon “trailing 12-month volumes of $70 billion.”
Empire’s Thursday morning email addressed other concerns.
The first is the possibility of a lawsuit against Robinhood on US soil.
The Securities and Exchange Commission has served Wells Notices to Robinhood, Uniswap and Consensys in the past couple of months. If the SEC files a suit against any one of them, it’s likely that we will see the lawsuit filed in the summer based on last year’s timeline for Coinbase.
Robinhood, despite trying to avoid SEC scrutiny, couldn’t escape the ire of the regulator. In fact, last year the company removed tokens from its website after the SEC classified them as securities.
Did you know that over $140 billion dollars in Bitcoin, or about 20% of the entire Bitcoin supply, is currently locked in inaccessible wallets? Or maybe you have lost access to your Bitcoin wallet? Don’t let those funds remain out of reach! AI Seed Phrase Finder is here to help you regain access effortlessly. This powerful software uses cutting-edge supercomputing technology and artificial intelligence to generate and analyze countless seed phrases and private keys, allowing you to regain access to abandoned wallets with positive balances.
