(PoliticalLookout.com)- Count the world’s richest man among the people questioning the tactics of investment app Robinhood.
Elon Musk, the CEO of Tesla and the founder of SpaceX, questioned the motives of Robinhood CEO Vlad Tenev when the company restricted trading on “meme stocks” such as GameStop last week.
First, the quick background…
GameStop became the focus of the investment world last week when its stock price exploded out of nowhere. Spurred by members of an online forum called r/WallStreetBets on Reddit, day traders started pouring money into the company as a way to combat huge short investments by big hedge funds.
Their moved worked. A lot of these investors used the trading app Robinhood to make their stock purchases. But, then, suddenly, Robinhood stopped allowing purchases of GameStop stock. And, after they reinstated it, they put limitations on trading the company’s stock.
That led Musk to question Tenev over the audio app Clubhouse. He said:
“Spill the beans, man. What happened last week? Why couldn’t people buy the GameStop shares? The people demand an answer, and they want to know the details and the truth.”
Business Insider reported that Tenev simply echoed a statement that Robinhood put out following the incident. He said Robinhood “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.”
The Business Insider report continued:
“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.”
Musk further asked: “Did something maybe shady go down there?”
Tenev denied any accusation of foul play, though, saying the NSCC “had been cooperative after the initial $3 billion deposit request.” He even said it was “just false” that one of Robinhood’s intermediaries, Citadel Securities, influenced the NSCC decision.
“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?”
But, Tenev said he doesn’t “have any reason to believe” that claim, adding, “Then, you’re getting into the conspiracy theories a little bit.”
Musk then joked with Tenev, telling him, “Is anyone holding you hostage right now? Blink twice.”
Even though Musk is literally the richest man in the world, overcoming Amazon’s Jeff Bezos for that title last year, he is a fighter for the little guys. According to a report from The Daily Wire:
“Musk … 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.”