Published 12:13 IST, February 2nd 2021
'People demand answers': Elon Musk grills Robinhood CEO over GameStop stock drama
Taking a dig at smartphone app’s boss, SpaceX CEO and billionaire Elon musk launched daring questions at Tenev in a wide-ranging 90-minute interview.
On a Clubhouse live discussion on February 1, Tesla's CEO Elon Musk who turned into an interviewer grilled Robinhood’s chief executive Vlad Tenev over freezing the GME stocks buying last week. The US video game retailer came under fire after a Reddit group of online traders, WallStreetBets, launched mass stock trading, impacting US hedge funds, as it blocked GME shares from buyers. However, the co-founder of Robinhood defended the decision to restrict trading in GameStop and other volatile stocks.
Taking a dig at the smartphone app's boss, SpaceX CEO and billionaire Elon Musk launched daring questions at Tenev in a 90-minute interview on the audio chat app. Musk told Tenev: "Spill the beans, man". He introduced the Robinhood's CEO as "Vlad the stock impaler” on the show.
"What happened last week? Why couldn't people buy the GameStop shares? The people demand answers, and they want to know the truth," said Musk. Musk asked in his vocal debut on invite-only and iOS-only Silicon Valley’s startup app, after inviting Vlad Tenev onboard to interview him about the Wall Street Bets debacle. In the Clubhouse room with more than 5,000 participants, Musk held a live discussion about Tesla and Neuralinks, following which he stirred the excitement saying: "Do you want to hear the real story from Vlad [from] Robinhood about what happened on the Street with GameStop?".
Question on Reddit's targeted Wall Street hedge
As Tenev appeared on the chat, Musk fired up questions, asking why Robinhood's boss decided to put limits on customers’ trading on GME stocks and eventually sold shares without notice. GameStop’s shares last week shot 1,600 per cent in a month after a bunch of inexperienced traders on Reddit's targeted Wall Street hedge funds resulting in millions of dollars of loss for some investors. US House Democrats, meanwhile, pledged to probe the Robinhood CEO over online stock-trading chaos. Meanwhile, in a blog post, the company addressed the concerns saying, "We’ve received questions about how Robinhood works, trading, clearing and settlement, and clearinghouses".
In a column titled 'What happened this week?' the firm explained the incident. "It was not because we wanted to stop people from buying these stocks. We did this because the required amount we had to deposit with the clearinghouse was so large," read the column. Furthermore, the gaming company continued, "With individual volatile securities accounting for hundreds of millions of dollars in deposit requirements—that we had to take steps to limit buying in those volatile securities to ensure we could comfortably meet our requirements".
Updated 12:13 IST, February 2nd 2021