Barstool Sports founder Dave Portnoy argues that retail investors cannot trust Robinood and its CEO, Vlad Tenev, after GameStop’s commercial frenzy.
Barstool Sports founder Dave Portnoy questioned Robinhood CEO Vladimir Tenev about his company’s conduct during the dramatic increase in GameStop shares last month, fueled by a group of amateur traders.
Portnoy had previously called Tenev “rat” and “liar” and suggested that Robinhood’s people “go to jail” after the stock broker blocked stock purchases from GameStop and other companies whose stock market value increased with the help of Reddit Users organizations.
However, despite the public’s hostility, Tenev accepted the invitation to a live debate with his most prominent critic.
“Ok Vlad, you know that everyone here who is watching hates you, right?” Portnoy started.
“This is what I heard,” Tenev laughed. “But look, I’m happy to be on your program and I hope we can get into it and answer a lot of those questions.”
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Portnoy questioned Tenev about whether or not Robinhood’s actions were based on a “liquidity issue”, throwing comments that he told CNBC denying that liquidity concerns were involved, while talking to Congress about the $ 3 billion that was raised during the ordeal.
“To me, that looks like a clear 180,” Portnoy reacted. “You don’t see this as a 180 and what is the real answer?”
Tenev rejected the idea, arguing that taking any position proposed by Portnoy on liquidity would be “selling more and less” the issue, since it is really a “systemic issue”.
“So, if you had $ 3 billion in the bank, would you still have done the same thing?” Asked Portnoy.
Tenev responded by saying that it is difficult to speculate with assumptions, but acknowledged that if Robinhood had not taken any action, the company would have “probably” faced a liquidity problem “in the future”.
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“We had to act to protect our company and our customers, because if the company could not continue to serve our customers, the situation would be much worse,” explained Tenev.
“So why didn’t you say that clearly?” Portnoy pushed back.
Tenev acknowledged that “it could have been clearer” during the short TV interviews and that he was “boiling in smoke” during the ordeal.
Portnoy then pointed to Tenev’s testimony at the congress, telling Robinhood’s CEO that House Financial Services Committee chairman Maxine Waters, D-Calif., “Chewed you” and “made you look like he was afraid to respond. to questions. “
“It looked like you were working as a lawyer,” said Portnoy.
After admitting that Tenev’s liquidity concerns were a “fair point”, Portnoy argued: “But the way you acted, and I think that’s the biggest problem … Robinhood, clearly – their marketing, everything about them, ‘we are democratizing trade, we are for the retailer,’ this is Robinhood’s brand and it clearly worked … Knowing that when you force people to sell, you just allow them to sell, but they don’t they can buy, you crater the stock, “insisting that Robinhood should just freeze his trades and instead” manipulate “the GameStop stock price.
“Look, I get it,” said Tenev. “We didn’t want to do that. We had to act very quickly to make sure it didn’t become a bigger problem. Everything Robinhood represents to allow people to trade and give people access and raise capital [inaudible] as fast as we could. “
Tenev promised Portnoy that he will do everything he can to ensure that “we don’t see this happening again”.
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“I think there are many things we can improve on, but I am proud of the way the team has dealt with the crisis on a large scale,” said Tenev.
“How is this possible?” Portnoy pushed back. “You are advertised as a company for retail merchants and you screwed them up! I mean, you protected the company and that’s what you did … but everything you built like this catering image … if you wanted to protect customers, you wouldn’t have stopped buying. That decision basically had to crater the price and left a ton of your customers holding the bag. “
“I understand how you feel this way and how customers can feel this way,” replied Tenev: “But customers who buy meme stocks are based on the ability of our business to operate, which is based on the correct functioning of the financial system. “If the financial system breaks down, things can go south very, very quickly.”
Tenev firmly denied that there was any “collusion” between Robinhood and the hedge funds, accusing Portnoy of being “wrong” for “perpetuating misinformation”.
“We support the boy, we have everything to do with it,” said Tenev.
“You did something and gave the big guy a huge advantage. This is the exact opposite of helping the little boy. You killed the little boy,” Portnoy snapped.
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Portnoy later reiterated his prediction that Robinhood “could not return” from this ordeal because, if there is another major incident, “you will not have my back”.
Tenev expressed optimism that “systemic change” is coming to solve current problems told Portnoy “you have my word” that Robinhood will “get better and better.”
The founder of Barstool Sports ended the exchange by saying to Tenev: “I’m not going to say good luck, because I don’t wish you luck. But I appreciate you coming.