Due to current market conditions, stock and cryptocurrency investment platform Robinhood reportedly received a 58% discount on its $170 million offer to acquire crypto exchange Ziglu.
The initial offer from Robinhood arrived in April, but according to numerous online reports around August 17, the company revised its proposal to $72.5 million due to adverse market conditions. On August 18, Ziglu CEO Mark Hipperson reportedly accepted the deal.
The bear market, the implosion of several major centralized crypto lenders, BlockFi, Celsius, and Voyager, and other macroeconomic factors such as Russia's invasion of Ukraine are said to have been highlighted by Robinhood.
According to CoinGecko, the total crypto market cap has dropped by nearly 40% since April, putting significant pressure on Robinhood to reconsider the amount it was prepared to spend on UK-based Ziglu.
Ziglu is also one of the top 50 unsecured creditors of the bankrupt cryptocurrency lender Celsius. Its funds on Celsius might be frozen indefinitely because the lender is rapidly running out of funds and is currently running a multi-billion dollar deficit while going through bankruptcy proceedings.
The acquisition of the said platform by Robinhood is part of the company's plans to establish inroads into the UK market, but the team, led by CEO Vlad Tenev, may have to start over if Ziglu rejects the new offer.
The new terms, however, appear to have put the company between a rock and a difficult place. In a letter to investors, founder Mark Hipperson stated that if the initial $170 million deal were canceled, his company would be left in an "immensely difficult market, and undercapitalized for the upcoming period."
A representative from Ziglu did not respond immediately to a request for comment. Despite his reservations about the revised figure, Hipperson told fintech news outlet Altfi that "we believe the revised proposal...is the best and only realistic path forward for the company."
The company’s most recent round of funding closed in November, raising the company's share price to $58.12. The new agreement reduces the share price to $34.04.