Why Robinhood’s PR Nightmare Keeps Getting Worse
CEO Vlad Tenev made every crisis mistake in the book
Every congressional hearing has at least one witness who has been cast in the role of the villain. And at last week’s House Financial Services Committee meeting into the GameStop saga (which I wrote about here), there was no question about who the villain was: Vlad Tenev, the CEO of the online trading platform Robinhood.
Tenev had barely started his opening statement before committee chair Maxine Waters started banging her gavel and telling him to focus his comments on what happened on January 28, when Robinhood and other platforms barred customers from buying shares of GameStop and other so-called meme stocks. The rest of the hearing went no better: Though there were other witnesses, including Citadel Securities’ C.E.O. Ken Griffin (who would normally be a more natural target of politicians’ anger venting), lawmakers had clearly set their sights on Tenev. They grilled him about a wide range of issues loosely connected, at best, to the GameStop story: Robinhood’s culture, its role in “gamifying” investing, its relationship with Citadel (a hedge fund which pays Robinhood hundreds of millions in order to execute its customers’ trades). And they grilled him about January 28, about why Robinhood put the trading ban in place and whether Tenev had been honest in his explanations at the time.
This undoubtedly came as no surprise to Tenev, who became Public Enemy №1 almost from the moment Robinhood put the trading ban in place. Alexandria Ocasio-Cortez and Rashida Tlaib on the left and Ted Cruz on the right inveighed against the move. Memestock investors lambasted Tenev across the internet. And Dave Portnoy, the CEO of Barstool Sports and now a guru for younger individual investors, made it his personal mission to demolish Tenev’s reputation. He called what Robinhood did “criminal behavior, plain and simple,” suggesting that the firm had engaged in “intentional market manipulation” in order to stop the upward momentum of GameStop’s stock and allow hedge funds who had been short the stock to limit their losses and exit their short positions. He said Tenev’s decision to halt trading would be “the end of Robinhood,” but suggested Tenev “willingly blew up his company” because that’s what his hedge-fund masters wanted…