Robinhood Receives 60% Discount on $170M Swap Deal: Report
Due to unfavorable market conditions, stock and cryptocurrency investment platform Robinhood reportedly received a 58% discount on its $170 million bid to buy crypto exchange Ziglu, as reported. reported Cointelegraph.
Although Robinhood made its initial offer in April, the company reportedly lowered it to $72.5 million in August after blaming unfavorable market conditions, according to a number of internet publications published at the time. Reportedly, the offer was accepted by Ziglu CEO Mark Hipperson on August 18.
The collapse of many major centralized crypto lenders, including BlockFi, Celsius, and Voyager, as well as other macro issues such as the Russian invasion of Ukraine, are among the many factors Robinhood reportedly pointed to.
According to CoinGecko, the total crypto market capitalization has fallen by around 40% since April. The drop added pressure on Robinhood to rethink how much it was willing to spend on Ziglu, Cointelegraph noted.
Cointelegraph further noted that Ziglu is one of the top 50 unsecured creditors to insolvent cryptocurrency lender Celsius, according to the listing. Given that the lender is fast running out of cash and has operated with a multibillion-dollar deficit while bankrupt, Ziglu’s funds on Celsius could be frozen for good.
However, founder Mark Hipperson wrote in a letter to investors that his company would find itself in a “very difficult and undercapitalized market for the period ahead” if the initial $170 million investment were to be terminated. Ziglu’s last funding round closed in November 2021 and the company’s share price rose to $58.12. With the new deal, shares now cost $34.04.
(With information from Cointelegraph)
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