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- Robinhood Buys Crypto Exchange
Robinhood Buys Crypto Exchange
Stock and crypto investment platform Robinhood has reportedly scored a 58% cut on its $170 million offer to buy crypto exchange Ziglu due to adverse market conditions.
The initial offer from Robinhood came in April, however according to various reports online around Aug.17, the company revised its offer to $72.5 million after citing adverse market conditions. Ziglu CEO Mark Hipperson reportedly accepted the offer on Aug. 18.
Robinhood is said to have highlighted a host of factors including the bear market, the implosion of several major centralized crypto lenders BlockFi, Celsius, and Voyager, and other macroeconomic factors such as the Russian invasion of Ukraine.
The total crypto market cap has fallen by nearly 40% since April according to CoinGecko, adding significant pressure to Robinhood to rethink the amount it was willing to spend on UK-based Ziglu.
Ziglu is also listed as one of the top 50 unsecured creditors to bankrupt crypto lender Celsius. Ziglu’s funds on Celsius could be locked indefinitely as the lender is quickly running out of money and has been operating at a multi-billion dollar deficit while it goes through bankruptcy proceedings.
Robinhood’s acquisition of Ziglu is part of the company’s plans to make a headway in the UK market, but the Robinhood team led by CEO Vlad Tenev may have to go back to the drawing board if Ziglu refuses the new offer.
However, the new terms seem to have left Ziglu between a rock and a hard place. Founder Mark Hipperson stated in a letter to investors that if the initial $170 million deal were to be canceled, his company would be left in an “extremely challenging market, and undercapitalized for the period ahead.”
A representative from Ziglu did not immediately respond to a request for comment. Hipperson told fintech news outlet Altfi that “we believe the revised proposal…is the best and only reasonable path forward for the company” despite expressing concerns of the revised figure.
Ziglu’s last round of funding was closed last November and bumped share prices in the company up to $58.12. The new deal drops the share price to $34.04.
If you invested in Ziglu via Seedrs, I bet you’re pretty pissed off right now.
— Mr Omneo (@mr_omneo) August 15, 2022
*This article originally appeared in Cointelegraph.
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