Cryptocurrency and stock investment platform Robinhood reportedly took a 58% cut to its $170 million offer to buy crypto exchange Ziglu due to adverse market conditions.
The initial offer from Robinhood was made in April, however, according to multiple online reports around August 17, the company adjusted the offer to $72.5 million aftermarket volatility. adverse variable. Ziglu CEO Mark Hipperson accepted the offer on August 18.
Robinhood highlighted a range of factors including a bear market, the collapse of several major centralized crypto lenders BlockFi, Celsius, and Voyager, and other macroeconomic factors such as the invasion. of Russia into Ukraine.
According to CoinGecko, the total crypto market capitalization has dropped by almost 40% since April, adding significant pressure on Robinhood to reconsider how much it is willing to spend on UK-based Ziglu.
Robinhood’s acquisition of Ziglu is part of the company’s plan to move into the UK market, but the Robinhood team led by CEO Vlad Tenev may have to return to the drawing board if Ziglu turns down a new offer.
However, the new terms put Ziglu at a great disadvantage. Founder Mark Hipperson has stated that if the original $170 million deal is canceled, his company will be left in an extremely challenging and undercapitalized market for the foreseeable future.
Ziglu’s last funding round ended last November and raised the share price of the company to $58.12. The new deal reduces the share price to $34.04.