All-In E22: Reflecting on the Robinhood situation with Bestie Guestie Vlad Tenev
Episode 22 • 2/13/2021
Key Discussions:
- GameStop Trading Halt Explanation
- Vlad explained that Robinhood had to restrict trading on 13 securities due to clearing house deposit requirements
- Denied allegations that Citadel, Sequoia, or the SEC pressured them to halt trading
- The company had to raise $3.4B in additional capital to meet deposit requirements and provide cushion for future growth
- Margin Trading & Risk Management
- Robinhood requires $2,000 minimum for margin trading
- Margin rates lowered to 2.5%
- Different stocks have different margin requirements (25-100%) based on volatility
- Options trading not allowed on margin
- Payment for Order Flow Discussion
- Vlad defended payment for order flow as industry standard practice
- Acknowledged need for more transparency in financial markets
- Compared to credit card interchange fees in terms of opacity
- Future Improvements & Changes
- Moving from T+2 to real-time settlement could solve many issues
- Better communication needed during crises
- Building out compliance and legal teams with experienced hires
- IPO Discussion
- Could not discuss specific IPO plans due to restrictions
- Hosts suggested making 100% of IPO shares available to retail investors
- Discussion about democratizing access to IPO shares versus traditional institutional allocation
Notable Moment:
Vlad revealed he had previously interviewed at one of the host's companies in 2008 but didn't get the job, leading to his eventual path to founding Robinhood.