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Robinhood scuttles deal to buy crypto company Ziglu

Illustration of two hands about to shake, but being kept apart by a downward trending arrow.

Illustration: Aïda Amer/Axios

Robinhood has canceled plans to buy U.K.-based crypto company Ziglu.

Why it matters: The dead deal puts pressure on Ziglu to address its future, given the picture it painted last year during a renegotiation.

Background: Robinhood agreed to acquire Ziglu in April, but in August it sought to renegotiate the price from $170 million to $72.5 million, AltFi reported.

  • Ziglu CEO Mark Hipperson urged shareholders to accept the lower valuation, saying at the time that a terminated deal would have left Ziglu in an "extremely challenging market, and undercapitalized for the period ahead."
  • "We believe the revised proposal ... is the best and only reasonable path forward for the company,” he wrote at the time.

Details: Robinhood terminated the agreement earlier this month, the company revealed in its earnings report yesterday.

  • It holds some Ziglu equity that was written down to zero, resulting in a $12 million impairment charge.
  • The Ziglu acquisition was marketed as Robinhood's way to catapult itself into the U.K. market. Robinhood said yesterday that it still plans to expand into the region.
  • Ziglu and Robinhood have not yet responded to requests for comment.

Of note: Robinhood and Ziglu announced the deal when bitcoin's price was above $41,000. Renegotiations began not long after the crashes of Three Arrow Capital and Terra. Now, post-FTX and with bitcoin's price at $22,760, the deal is dead.

The bigger picture: Robinhood is still open to the idea of M&A, even if it has soured on this deal. "It's not lost upon us that we have a large balance sheet, and the environment now is going to create some opportunities," said Robinhood CEO Vlad Tenev.

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