CEO vs. CEO: Elon Musk Grills Robinhood Over GameStop Intervention
By Erika Dee
Elon Musk grills Robinhood's CEO for trying to intervene in how the GameStop drama was unfolding, thereby revealing where their true loyalties must lie. In effect, the Tesla CEO threw a bone to the so-called Reddit "amateur" investors since it appears that he is siding with them in this still ongoing frenzy.
The CEO asked why the trading app has decided to put a stop on the GameStop buying when the shares have exhibited an exorbitant rise, Washington Post reported.
Elon Musk has something to say about Robinhood
"Do you want to hear the real story from Vlad [from] Robinhood about what happened on the Street with GameStop?" Musk asked on Clubhouse, which is an exclusive audio app that has become popular among Silicon Valley elites.
He then called on the moderators to give the mic or the floor to Robinhood chief executive Vladimir Tenev, who was also on the session, so he could explain the fishy move.
Musk did not merely directed the floor to Robinhood's CEO. Instead, what transpired seems to be a CEO-to-CEO showdown, because Musk grilled Tenev like there's not tomorrow.
"Spill the beans, man," Musk told Tenev. Must has introduced Tenev as "Vlad the stock impaler," which is an apparent dig in the first place.
"What happened last week? Why couldn't people buy the GameStop shares? The people demand answers, and they want to know the truth," he said (via Yahoo Finance).
Tenev Defends Robinhood
Tenev tried to say Musk is merely buying the many conspiracy theories out there, but still found himself trying to defend himself against the CEO-turned-interrogator's questions.
"We had no choice in this case," Tenev said (via CNBC). "We had to conform to our regulatory capital requirements."
Tenev then explained that Robinhood's operations team has received a request at 3:30 a.m. PT on Thursday from the National Securities Clearing Corp.
The request reportedly called on Robinhood and other brokers to meet specific deposit requirements from clearinghouses like NSCC each day.
The amount they were required to meet is based on factors such as volatility and concentration in certain securities, Tenev further explained.
"Robinhood got a request for a security deposit of $3 billion from NSCC to back up trades, "an order of magnitude more than what it typically is," Tenev said.
This was a sign that there was a need to limit trades.
"Did something maybe shady go down here?" Musk asked in return.
"I wouldn't impute shadiness to it or anything like that," Tenev replied. "The NSCC was reasonable subsequent to this."
Robinhood and the NSCC later agreed to decrease the $3 billion down to around $1.4 billion, but Tenev claimed that there was more action needed to limit trades.
Musk's questions, seemingly on the side of the Reddit investors, and the general public, are not that surprising. The Tesla chief has shown support for WallStreetBets on Twitter in the middle of the drama last week.