Robinhood CEO admits communication gap, ahead of House testimony
Robinhood, the trading app popular with young investors, could have better explained why it was limiting the buying of heavily shorted stocks caught in the social media-fueled trading frenzy around GameStop Corp, the CEO said. society.
“No doubt we could have communicated this a little better to customers,” CEO Vlad Tenev said on the All-In podcast on Friday, whose hosts include Chamath Palihapitiya, who had been heavily critical of Robinhood over trade restrictions, and Jason Calacanis. . , a Robinhood investor.
Tenev’s comments came ahead of his scheduled Feb. 18 testimony by the U.S. House Financial Services Committee on the trade turmoil and Robinhood’s role in it. The CEOs of Citadel Securities, Melvin Capital and Reddit will also testify.
More from this section
Robinhood did not respond to a request for comment.
These moves were in part due to retail investors coordinating on sites like Reddit’s WallStreetBets to push prices up and force hedge funds like Melvin to unwind bearish positions. Several other brokers have also restricted trading in the shares.
READ ALSO : Elon Musk’s jokes with Robinhood CEO sparks scramble for Clubhouse app
Tenev said the restrictions were necessary due to a sharp increase in filing requirements by a post-trade regulator, but this was not made clear in automated emails sent to Robinhood clients in early January 28. .
“As soon as those emails got out, the conspiracy theories started coming in, so my phone blew up with, ‘how could you do that, how could you be on the hedge fund side,'” he said. -he declares.
“We probably could have provided more details on this with the foresight that maybe clients would think a hedge fund forced us to do it,” he later said.