For many individuals, final week introduced with it a lesson briefly promoting, on-line buying and selling and the energy of Reddit to affect the inventory market. The consequences of the subreddit WallStreetBets on the inventory value of GameStop have, by now, develop into well-documented. Extra nebulous, nonetheless, is what occurred with the buying and selling app Robinhood, which briefly paused purchases of GameStop and some different WallStreetBets-approved shares.
Earlier at this time, Robinhood CEO Vladimir Tenev mentioned simply what had occurred final week and why the firm had briefly applied a number of contentious insurance policies. Tenev’s feedback got here in dialog with Elon Musk, who was himself being interviewed on the invitation-only social media app Clubhouse.
The Washington Publish has particulars on Musk’s interaction with Tenev, which got here at the finish of Musk’s personal interview with Clubhouse. “Why couldn’t individuals purchase the GameStop shares?” Musk requested Tenev. “The individuals demand solutions, and so they need to know the fact.”
Tenev informed Musk that on Thursday morning at 3:30 am Pacific time, Robinhood’s clearing company requested $Three billion, on account of the elevated curiosity in GameStop and different WallStreetBets-approved shares. Tenev revealed that Robinhood had solely raised $2 billion at that time.
Musk continued to grill Tenev. “Did you promote your purchasers down the river or did you don’t have any alternative?” he requested.
The Publish stories that Tenev referred to as for higher monetary transparency in response to Musk’s query, and “wouldn’t decide to imposing no restrictions on the shares.” These is probably not the solutions many Robinhood customers need to hear — and it’ll be fascinating to see how the app fares shifting ahead.
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