Clubhouse is a new iPhone-only, audio-only social platform and tonight they had their most important call yet. After a Q&A with the community, Elon brought on the CEO of Robinhood, Vladimir Tenev.
While everyone was expecting a fairly timid conversation, Musk took the reins and grilled Tenev over the recent scandal that seen Robinhood users prevented from buying $GME $AMC and other stocks.
There were some really important details revealed during the interview. Tenev said they were asked for $3Billion in collateral from the clearninghouse. This is a significant issue, given the company did not have those funds. According to Crunchbase, Robinhood has raised a total of $3.2Bil.
If Robinhood was unable to find a way to fund the amount asked, they would be unable to trade and therefore out of business, potentially impacting as many as 13 million retail investors.
We now know the company raised $1 billion in equity to solve the issue, but not after talking down the figure owed from $3billion, to $700 million. The money was raised and tomorrow when the markets open, they will be relaxing the restrictions for stock trading.
Vlad’s had a couple of shots at explaining what went on this week and unfortunately he’s not great at it. What was surely supposed to reassure investors, likely is going to backfire after he missed being able to answer some key questions.
If somehow you haven’t heard about the saga this past week, you can get a great background on /r/wallstreetbets, Robinhood and GameStop from Episode 19 of the All-in Podcast.