For many people, last week brought with it a lesson in short selling, online trading and the power of Reddit to influence the stock market. The effects of the subreddit WallStreetBets on the stock price of GameStop have, by now, become well-documented. More nebulous, however, is what happened with the trading app Robinhood, which temporarily paused purchases of GameStop and a few other WallStreetBets-approved stocks.
Earlier today, Robinhood CEO Vladimir Tenev discussed just what had happened last week and why the company had temporarily implemented a few contentious policies. Tenev’s comments came in conversation with Elon Musk, who was himself being interviewed on the invitation-only social media app Clubhouse.
The Washington Post has details on Musk’s interaction with Tenev, which came at the end of Musk’s own interview with Clubhouse. “Why couldn’t people buy the GameStop shares?” Musk asked Tenev. “The people demand answers, and they want to know the truth.”
Tenev told Musk that on Thursday morning at 3:30 am Pacific time, Robinhood’s clearing agency requested $3 billion, due to the increased interest in GameStop and other WallStreetBets-approved stocks. Tenev revealed that Robinhood had only raised $2 billion at that point.
Musk continued to grill Tenev. “Did you sell your clients down the river or did you have no choice?” he asked.
The Post reports that Tenev called for greater financial transparency in response to Musk’s question, and “would not commit to imposing no restrictions on the stocks.” Those may not be the answers many Robinhood users want to hear — and it’ll be interesting to see how the app fares moving forward.
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