Robinhood boss Tenev stays at the hotel over death threats
No time right now?
Vlad Tenev, head of the online broker Robinhood, apparently does not dare to go home. The reason should be death threats, which Tenev seems to take seriously.
With the decision to completely suspend trading in this and other small stocks in the middle of the height of the Gamestop rally, Robinhood caused massive annoyance among its customers, who now number 13 million users.
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Robinhood: Demolition of the Gamestop rally upsets millions
The share price collapsed due to the suspension of trading. One can speak of the turning point in the Gamestop rally. Not only had customers of the trader app loudly announced their displeasure, the greats of US politics also sharply criticized Robinhood. In Texas, the prosecutor got involved and spoke of corruption.
A hearing in the US Congress is scheduled for Thursday to discuss what goes on around the trade suspension and the Gamestop rally in general. In addition to Robinhood representatives, representatives of the clearing house Citadel Securities, the hedge fund Melvin Capital and the Reddit platform, through whose community Wallstreetbets the buying and selling campaigns were supposedly coordinated, were also invited. The Youtuber Roaring Kitty, who also has a significant share in the processes, has to appear.
Tenev feels safer in the hotel than at home
Some users are only moderately interested in all of this. For them, Tenev has become a traitor, and they have renamed his company Robbinghood (robbing, to rob). A few days ago, angry protesters had thrown dog excrement at Robinhood headquarters and sawed off a statue in front of the building.
How Bloomberg reports, Tenev takes the death threats against him so seriously that he has avoided going home for days. Instead, he is supposed to stay in a hotel to wait for the wave of anger to subside.
In addition to Tenev, institutional investors are also faced with death threats. The angry retail investors accuse Robinhood and the institutional investors of having acted in a coordinated manner to obstruct free competition by suspending trading in an illegal manner with the intention of safeguarding their benefices.
Tenev puts the blame on the clearing house
Robinhood boss Tenev had tried in a conversation with Elon Musk at Clubhouse to put the events that had led to the suspension in the right light. But that had opened up more questions than answers.
According to this, the clearing house, which actually processes the transactions for Robinhood, ultimately demanded a significant increase in the deposited collateral early in the morning before the suspension of trading. At three billion US dollars, this amount was many times higher than is typically the case and even exceeded the company’s total funding (2 billion).
With the decision to restrict trading, the clearing house, which is operated by Citadel Securities, a subsidiary of the Citadel hedge fund, was negotiated down to a security deposit of $ 700 million.
There should be some questions to be answered in the congressional hearing. Including whether the clearing house could have abused its market power to force Robinhood into desired behavior.
