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Dave buys back FTX Ventures investment at a discount

Jan 5, 2024
Illustration of a one hundred dollar bill being yanked out of the spotlight by a stage hook.

Illustration: Maura Losch/Axios

Bankrupt crypto exchange FTX invested $100 million via convertible notes in Dave (Nasdaq: Dave) in 2022. Today, the neobank said it plans to repay that amount early for a discounted $71 million.

Why it matters: Dave and Mysten Labs were two of the largest known checks written by the FTX empire, which had raised questions about whether those two deals could face clawback attempts.

Details: Dave said on Friday that it had reached an agreement with FTX Ventures to buy back that stake, pending approval from the bankruptcy court.

  • Dave and FTX had been in contact for roughly a year over a potential deal, with FTX reaching out in October to confirm that they were interested, Dave CEO Jason Wilk tells Axios.

The big picture: In buying back FTX's investments, companies take away the uncertainty over who might end up as their creditors and the possibility of an ugly clawback attempt.

  • In this case, Dave is also paying less than it would have had FTX not undergone a restructuring.
  • Had FTX chugged along as usual, Dave would've had to pay $100 million back to FTX Ventures with an interest rate of 3% a year.
  • FTX meanwhile now gets cash rather than hard-to-distribute promissory notes as it seeks to repay customers.

Zooming out: Dave hasn't been the only company touched by FTX buy back an investment in itself.

By the numbers: Shares of Dave rose 5% in early trading Friday, with Wilk emphasizing that the company had $171 million in cash and cash equivalents by the end of the third quarter.

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