Dave Portnoy Hurls Insults at Robinhood’s Vlad Tenev in Livestreamed ChatBy
Robinhood has been criticised for curbing trading in GameStop
Tenev says curbs were necessary to prevent liquidity crunch
Robinhood Markets Chief Executive Officer Vlad Tenev went into his interview with Dave Portnoy looking forward to discussing Bulgarian pizza. Within the first few minutes of their chat, he was called a “rat” by the brash Barstool Sports founder.
The insults continued throughout their 40-minute livestreamed discussion on Tuesday night. Portnoy played an edited video that depicted Tenev as a clown, told him that everyone watching “hates your guts” and branded the CEO’s hairstyle at a government hearing last week as “ridiculous.”
The source of the acrimony was Robinhood’s decision to curb trading last month during the mania over “meme” stocks such as GameStop Corp. Portnoy, a cult figure for individual investors who follow the mantra that “stocks only go up,” has previously said that he lost about $700,000 after selling his “meme” stock holdings during the market slide that followed Robinhood’s clampdown.
The brokerage’s move was a precautionary measure that was necessary, Tenev told Portnoy on Tuesday. “We very likely could have faced a liquidity issue in the future,” he said. “We had to act to protect the firm and our customers.”
Portnoy pressed the CEO on why the company failed to allow customers to freely trade and communicate the issues it was facing more clearly. He also asked why Robinhood hadn’t provided more transparency on its liquidity situation.
“The L word is a big thing in financial services,” Tenev said. “‘Liquidity issue’ means you can’t meet your capital requirements or your deposit requirements, and you’re essentially dead. That was not the case with Robinhood. We met our capital requirements, we met our deposit requirements.”
Those explanations seemed to do little to assuage Portnoy, who has accused Tenev of siding with Wall Street and against individual investors.
“You know everybody watching this hates your guts right,” Portnoy said Tuesday.
“That’s what I hear,” Tenev responded.
Portnoy told Tenev that the no-fee brokerage turned its back to its customers and “killed the little guy” by causing stocks to crater. When he pressed Tenev on why Robinhood didn’t also restrict the selling of shares to freeze the market, the executive responded it was to protect long positions.
Tenev said the decision to restrict trading was to meet deposit requirements for clearinghouses and once again that there was no collusion between Robinhood and any hedge fund or market maker. He told Portnoy that until recently he hadn’t heard of Melvin Capital Management, which lost billions closing out its GameStop position and reducing other wagers.
Still, the brokerage was witnessing “incredible growth” because of the hype. It was the first time that something going viral on social media transplanted over to the financial markets, and the structure of the system has to be improved to prevent any future scandals, Tenev said.
By the end of the interview, the Robinhood CEO, who was wearing a hat that read “Taco Tuesday” on it, said he only wore the hat to cover his hair because Portnoy had made fun of it during the GameStop House Financial Services hearing last week.
“Vlad, your hair, it looks normal here,” Portnoy said. “It looked like, your scalp, somebody took a wig and put it on, I mean it was a ridiculous look.”