You’d be hard-pressed to find two people who better encapsulate the retail trading rally than noted scumbag Vlad Tenev, the co-CEO of Robinhood, and Dave Portnoy, the founder of Barstool Sports who took up investing as the pandy halted the sports world.
The interview began when Davey Day Trader asked the seemingly timid Tenev whether he knew that everyone hated his guts, as Robinhood’s decision to restrict trading in GameStop effectively ended the short squeeze momentum in that trade.
Tenev was asked about the disparity between his going on CNBC and denying there was liquidity issue, then revealing in an interview days later that the brokerage faced a $3 billion margin call in the middle of the night.
Tenev asserted it wasn’t, as Portnoy described it, a 180-degree shift. “Boiling it down to a liquidity issue both oversells it & undersells it simultaneously,” he said. Tenev said Robinhood wasn’t the only firm that limited trading in gaming retailer GameStop, cinema chain AMC, Nokia, and other popular stocks, calling it a “systemic issue.”
Asked poignantly if Robinhood would have regulated trading in GameStop and other popular Reddit stocks without the 3 a.m. phone call, Tenev admitted it would not. “If we had a bunch more headroom, we probably would’ve let things continue,” he said.
Tenev conceded that the firm would have faced a liquidity issue — the next day — had it not acted. Defending his CNBC interview, Tenev said he was “running on fumes” since he was scrambling to raise $3.4 billion in capital to resume trading.
Portnoy also pressed Tenev on whether Robinhood should have restricted selling as well as buying — to not crater the stocks — to which Tenev replied that the margin requirements wouldn’t have been helped by limiting selling. Basically, GFY.