Due to unfavourable market conditions, stock and cryptocurrency investment platform Robinhood reportedly received a 58% discount on its $170 million offer to purchase crypto exchange Ziglu, as reported by Cointelegraph.
Although Robinhood made its initial offer in April, the company reportedly lowered it to $72.5 million in August after blaming unfavourable market conditions, according to a number of internet publications published around that time. According to reports, the offer was accepted by Ziglu CEO Mark Hipperson on August 18.
The collapse of numerous significant centralised crypto lenders, including BlockFi, Celsius, and Voyager, as well as other macroeconomic issues like the Russian invasion of Ukraine, are among the many factors that Robinhood is alleged to have emphasised.
As per CoinGecko, the total crypto market cap has fallen by approximately 40% since April. This decline has added pressure on Robinhood to rethink the amount it was willing to spend on Ziglu, Cointelegraph noted.
Cointelegraph further noted, Ziglu is one of the top 50 unsecured creditors of the insolvent cryptocurrency lender Celsius, as per the list. Since the lender is rapidly out of cash and has been operating at a multi-billion dollar deficit while it is going through bankruptcy, Ziglu’s funds on Celsius may be permanently frozen.
However, Founder Mark Hipperson wrote in a letter to investors that his company would be left in a “very tough market, and undercapitalised for the period ahead” if the initial $170 million investment were to be terminated. Ziglu’s last round of funding was closed in November 2021, and the company’s stock price increased to $58.12. With the new agreement, shares now cost $34.04.
(With insights from Cointelegraph)