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Because of Gamestop shares: Elon Musk against “RobinHood” boss Tenev

Stock chaos, small investor uprising, fear of crashes!

The duel of the stock market giants: This Monday morning, Tesla boss Elon Musk (49) squeezed the Bulgarian-American billionaire Vladimir Tenev, founder of the trading platform "RobinHood".

After small investors had agreed on the Internet platform “Reddit” to drive up the course of the video game provider “Gamestop” by making spontaneous purchases against the bets of large hedge funds, the founder of “RobinHood” was heavily criticized.

Why? On the “RobinHood” platform, small investors can trade with, among other things, the “GameStop” shares. Until last week. “RobinHood” temporarily stopped trading certain stocks - to the annoyance of many users. The trading app dissolved on Friday, BUT on one condition: a maximum of one share per person may be purchased.

Critics are now accusing the platform of ceasing trading last Thursday to protect hedge funds.

On the audio platform “Clubhose” Tenev appeared as a surprise guest in a question and answer session with “Space X” founder Elon Musk. And faced Musk's criticism.

Since last week, the Tesla boss has been on the side of the Internet rebels in the war between the small “Gamestop” investors and the Wall Street hedge funds.

Musk, currently the richest man in the world, demanded “inside knowledge” from the “RobinHood” founder. Musk clearly: “People demand truth!” The truth behind why “RobinHood” really blocked stock trading with “GameStop” at times.

But first Tenev described the day when the “Gamestop” hype reached his platform: “Last Wednesday (...) there was an unprecedented volume, an unprecedented load on our systems. As you know, some of the so-called 'meme stocks' * have gone viral on social media and there has been a surge in trading volume. "

* Meme stocks, put simply, are stocks that have gone viral.

In the conversation, Tenev became more specific: “On Thursday morning at 3:30 am, while I was still sleeping, our operations team received a message from the NSCC, the National Securities Clearing Corporation Red.). "

According to Tenev, the message said the NSCC had asked for a $ 3 billion increase in deposits for Thursday's trading.

To explain: As the "Wall Street Journal" reported, the regulatory authority was concerned that "RobinHood" might lack the money to cover the inquiries of the coming days.

"We had already raised $ 2 billion in venture capital," Tenev said in the "Clubhouse" talk. And stated that he considered the NSCC's calculations to raise another billion to be "opaque".

Musk speaks of shady behavior

Elon Musk then asked further in the word duel, wanted to know "whether something dubious has happened". It would seem strange to him “that you suddenly get a $ 3 billion debt, you know, at 3:30 in the morning. Just suddenly out of nowhere. "

Tenev reacted defensively, dismissing “shadyness” and found it unsurprising that the NSCC got involved: “They worked with us to bring the price down. It wasn't anything special. "

The crucial question from Musk: Why does “Robinhood” temporarily stop trading “Gamestop” shares for a day?

Tenev: “In this case we had no choice, we had to meet our regulatory capital requirements. (...) The fact is, people get really pissed off when they hold stocks and want to sell them and they can't. So that's categorically worse. Many other brokers, I think, are in the same situation. "

In the end, Musk also addressed the “Robinhood” founder about the role of the US company “Citadel Securities” in helping brokers and shareholders to trade in programs.

Recently there were rumors that “Citadel Securities” may have put pressure on “Robinhood” to stop trading “GameStop” shares.

The irony of the whole story: Citadel Securities supported the tumbling hedge fund with 2.73 billion US dollars with "Melvin Capital", which triggered the shareholder uprising on the net with its bets on "GameStop" in the first place.

Tenev declined: "There was a rumor (...), but that's just wrong."

Musk then ended the conversation by saying, “Well, I think we'll see what happens. Hopefully that was enlightening ... or at least a little entertaining. "

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