Robinhood CEO Dismisses Talk of Sale to Schwab, Other Rival

In May, Bankman-Fried disclosed that a company he owns had taken a 7.6% position in Robinhood, but CNBC, in reporting on Tenev's comments yesterday, noted that Bankman-Fried in the meantime has said that FTX isn't interested in buying the investment firm.

Tenev and Robinhood's other co-founder control a majority of the brokerage firm's voting shares, according to Bloomberg.

The Industry Weighs In

"It is our policy not to comment on market rumors or speculation," a Schwab spokeswoman told ThinkAdvisor via email. FTX didn't immediately respond to an email seeking comment.

Timothy Welsh, Nexus Strategy LLC president, CEO and founder, indicated he didn't see a high likelihood that Schwab or FTX would buy Robinhood.

"I think it's almost a zero chance that Schwab would do it because they're in the middle of digesting TD Ameritrade," he told ThinkAdvisor today. "Maybe down the road," but Schwab doesn't have the bandwidth for another big deal now, he added.

As for FTX, the question is whether they want it, according to Welsh. He said it would be challenging to take on a big deal with an inordinate amount of assets and accounts to manage, and noted that users can go elsewhere when companies merge.

"It's a challenging brokerage environment," he said.  "There's a lot of risk involved in discount brokerage these days."

Revenue streams are more challenging without commissions, and companies like Robinhood rely on the payment for order flow business model, which the Securities and Exchange Commission and other regulators are looking at as potentially unfriendly to consumers, Welsh said.

"The discount brokerage world is highly competitive" and therefore there's not much room to squeeze basis points, he added. In addition, Robinhood attracts mostly small investors, he said. "High net worth investors are not at Robinhood," Welsh said in a phone interview.