Piper Sandler notes that Miami International (MIAX) and Robinhood (HOOD) announced an agreement by which the former will sell a 90% stake in MIAXdx to a JV operated by Robinhood and Susquehanna International Group. MIAXdx holds a suite of derivatives licenses, including a DCM – Designated Contract Market, DCO – Derivatives Clearing Organization, and SEF – Swap Execution Facility, which will allow SIG and Robinhood to build a prediction markets exchange. Piper views this as quite positive for Robinhood, who the firm estimates will receive a 45% boost on its prediction market economics on contracts traded through the new JV. Piper has an Overweight rating on Robinhood with a price target of $155 on the shares.
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