Elon Musk interviewed Robinhood CEO Vlad Tenev on Sunday night on the audio app Clubhouse. He asked Tenev about why Robinhood stopped users from trading “meme stocks” such as GameStop.
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February 1, 2021 3 min read
This story originally appeared on Business Insider
Robinhood was the target of widespread outrage last week when it stopped users from purchasing shares of GameStop, AMC, BlackBerry, and other so-called meme stocks that had rocketed over the week, fueled by Reddit users.
Musk went on Clubhouse for a wide-ranging interview in which he spoke about his plans to colonize Mars, his neural-technology company Neuralink, and his love of memes. At the end of the interview, Musk brought in Tenev, introducing him as “Vlad the stock impaler.”
“Spill the beans, man, what happened last week? Why couldn’t people buy the GameStop shares?” Musk said. “The people demand an answer, and they want to know the details and the truth.”
Tenev said Robinhood had been forced to temporarily stop users from buying those stocks because the surge resulted in a deposit requirement of $3 billion from the National Securities Clearing Corporation. Robinhood had raised only $2 billion in venture capital, so it spoke with the NSCC to get that requirement reduced to $700 million, Tenev said.
His comment echoed a statement from Robinhood on Friday.
Vlad Tenev, a cofounder and CEO of Robinhood.
Image Credit: Noam Galai | Stringer | Getty Images via Business Insider
Tenev said that the NSCC’s decision-making process to get to the $3 billion figure was “opaque” and that it was hard to know why it settled on that.
“Did something maybe shady go down here?” Musk said.
Tenev answered that he wouldn’t say so and that the NSCC had been cooperative after the initial $3 billion deposit request.
Musk also asked whether Citadel, a major hedge fund and intermediary for Robinhood, could have influenced the NSCC’s decision.
“There was a rumor Citadel or other market makers kind of pressured us into doing this,” Tenev said, “and that’s just false.”
“But wouldn’t they have a strong say in who got put in charge of that organization, as it’s an industry consortium and not a government … regulatory agency?” Musk said.
Tenev said he didn’t “have any reason to believe” that. “Then you’re getting into the conspiracy theories a little bit,” he said.
Musk regularly chimed in during the interview with jokes; at one point he asked Tenev, “Is anyone holding you hostage right now?”
Many of the Reddit traders said a motivation for galvanizing meme stocks was to take on hedge funds with heavily shorted stocks. Musk, who has historically attacked short-sellers, has been described as a sort of folk hero for Reddit day traders.
This wasn’t the first time Musk demanded answers from Robinhood. Last week, he expressed support for Rep. Alexandria Ocasio-Cortez’s call for the House Financial Services Committee to hold a hearing on the app’s actions.
Robinhood allowed trading of meme stocks to resume on Monday with some restrictions.