In the wake of Wall Street reeling from amateur investors pouring money into stocks heavily shorted by multiple hedge funds, most notably GameStop, SpaceX founder and Tesla CEO Elon Musk challenged Robinhood CEO Vlad Tenev about restricting trading to GameStop and other so-called meme stocks.
Unexpectedly, Musk pressed Tenev while on audio app Clubhouse. “Spill the beans, man, what happened last week? Why couldn’t people buy the GameStop shares?” Musk asked. “The people demand an answer, and they want to know the details and the truth.”
As reported by Business Insider, Tenev echoed a statement from Robinhood. The company, he said, per the report, “had been forced to temporarily stop users from buying those stocks because the surge had resulted in a deposit requirement of $3 billion from the National Securities Clearing Corporation. Robinhood, which had raised only $2 billion in venture capital, spoke with the NSCC to get that requirement reduced to $700 million, Tenev said.”
“Tenev said that the NSCC’s decision-making process to get to the $3 billion figure was ‘opaque’ and that it was hard to know why it settled on that,” the report added.
“Did something maybe shady go down here?” Musk said. Tenev denied the accusation, and noted that the NSCC “had been cooperative after the initial $3 billion deposit request,” Business Insider reported.
The Robinhood CEO also said it was “just false” that Citadel Securities, a market maker and intermediary for Robinhood, could have influenced the decision from the NSCC: “There was a rumor that Citadel or other market makers kind of pressured us into doing this, and that’s just false.”
“But wouldn’t they have a strong say in who got put in charge of that organization since it’s an industry consortium and not a government consortium, or not a government regulatory agency?” Musk questioned.
Tenev doesn’t “have any reason to believe” that, he said, adding, “Then you’re getting into the conspiracy theories a little bit.”
During the interview, Musk joked to Tenev, “Is anyone holding you hostage right now? … Blink twice.”
As noted by The Daily Wire, Musk has encouraged the prospect of small investors beating Wall Street elites at their own game:
“Here come the shorty apologists,” “give them no respect,” “get Shorty,” he tweeted on Thursday in reference to those defending hedge funds that had bet against GameStop.
Musk — who boasts a net worth of nearly $190 billion and recently overtook Amazon founder Jeff Bezos as the world’s richest man — described the practice of shorting stocks as “a scam.”
He is also highly critical of Big Tech’s attempts to mute amateur investors’ conversations. “Even Discord has gone corpo …” Musk remarked after the platform banned members of r/WallStreetBets.
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