Robinhood jumps after striking prediction markets exchange deal

Shares of Robinhood Markets HOOD.O up 6.4% to $122.97 early Weds after striking deal to take over a regulated exchange run by Miami International Holdings MIAX.N to expand into prediction markets

In announcement late Tues, HOOD will acquire a 90% stake in LedgerX, which was previously part of FTX, and will introduce a futures and derivatives exchange in a joint venture with Susquehanna International Group

The move comes as the prediction markets business attracts mainstream interest, with players like Intercontinental Exchange ICE.N, CME Group CME.O and CBOE CBOE.Z also planning to enter the space

HOOD recently traded at about 47x forward earnings, below its 2-yr avg of about 64x, per LSEG Datastream data

With the moves on the session, HOOD stock has surged ~230% YTD, far outpacing the Nasdaq's .IXIC ~20% rise

18 of 25 brokerages covering HOOD rate stock "strong buy" or "buy", 6 rate "hold" and 1 recommends "sell"; median PT of $155 up from $120 on Aug 26