Ahead of his testimony in front of congress, Robinhood CEO Vlad Tenev is reportedly in hiding from angry client mobs, living out of a hotel in an undisclosed location.
Tenev has received threats on his life and is just biding his time waiting to speak with U.S. lawmakers this week, the report notes. He has avoided going home since the incident took place, due threats on his life, one source told Bloomberg.
Forgive us for being curt, but at this point, we have seen enough of Tenev "playing dumb" over the last couple weeks to wonder whether or not this story is based in truth or is clever PR spin to try and draw out some much needed sympathy. But the fact is that our sympathy lies with the retail trader who was trying to stick it to the institution - not the undercapitalized, poorly run institution itself.
Tenev has "been making grim jokes about feeling hated" in private conversations, the report continued.
Tenev is tasked this week with calming the mob that he enraged just weeks ago during the midst of the GameStop trading chaos, where Robinhood limited names that clients were allowed to trade and needed to raise billions in emergency capital to meet liquidity requirements.
Gene Grabowski, a partner at crisis communications firm Kglobal, said: “In every congressional hearing, in every news story, there’s a victim, villain and a vindicator. He’s going to go in there automatically being the villain."
And unlike other Silicon Valley names that have faced off in front of congress, like Mark Zuckerberg or Jack Dorsey, Tenev will not have to sit in front of the House Financial Services Subcommittee. He will be flanked by veterans like Ken Griffin from Citadel, who will likely be less intimidated by the surroundings.
Recall, this past weekend, we published an article called "Exposing The Robinhood Scam: Here's How Much Citadel Paid To Robinhood To Buy Your Orders". The piece laid out, in detail exactly what the dynamic between Griffin's Citadel and Tenev's Robinhood was because, frankly, as we noted over the weekend, we've had it with the constant stream of lies from Robinhood and neverending bullshit from Tenev.
With Tenev scheduled to testify on Thursday, alongside the CEOs of Citadel, Melvin Capital and Reddit, the apriori mea culpas have started to emerge - if a little too late - the former HFT trader spoke late on Friday on the All-In Podcast hosted by Chamath Palihapitiya, who had strongly criticized Robinhood over the trading restrictions, and Jason Calacanis, a Robinhood investor, and said that “no doubt we could have communicated this a little bit better to customers."
What he is referring to, of course, is Robinhood's outrageous decision to restrict the buying of 13 heavily shorted stocks on Jan 28 that had been driven to record highs, including GameStop, whose shares had surged more than 1,600%.
Tenev said the restrictions were necessary due to a large increase in collateral/deposit requirements by the DTCC, but that was not spelled out in automated emails sent to Robinhood customers early on Jan. 28.
Tenev then decided to pull the oldest trick and deflect attention from his own mistakes by blaming "conspiracy theories."
"As soon as those emails went out, the conspiracy theories started coming, so my phone was blowing up with, ‘how could you do this, how could you be on the side of the hedge funds,’" he said.
What Tenev did not say, or explain, is why his company - which is merely a client-facing front of Citadel, which buys the bulk of Robinhood's orderflow to use it perfectly legally in any way it sees fit - was so massively undercapitalized that the DTCC required several billion more in collateral to protect Robinhood's own investors against the company's predatory ways of seeking to capitalize on the gamification of investing making it nothing more (or less) than a trivial pursuit to millions of Gen Z and millennial investors, a point which Michael Burry made so vividly.
The #mainstreetrevolution is a myth. Zero commissions and gamified apps were designed to feed flows to the two most influential WS trading houses. A few HFs got hurt, but if retail is moving toward more trading and away from fundamentals, WS owns that game. #Stonks by design. https://t.co/Y4raF0jiM3— Cassandra (@michaeljburry) February 9, 2021
Incidentally we know why Tenev did not mention it: it's because Robinhood's back office is a shambles of a shoestring operation, one which never anticipated either such a surge in trading not a multi-billion collateral requirement; had Robinhood been a true brokerage instead of pretending to be one, and run merely to open as many retail accounts as it could in the shortest amount of time, thus generating the most profit in the quickest amount of time to allow its sponsors a quick and profitable exit, it would actually have been on top of this.