Robinhood, a privately held company in Menlo Park, Calif., declined to make Mr. But “there’s a consistent pattern which makes one question whether he knows what is going on inside his company,” Vijay Raghavan, an analyst at Forrester Research who covers Robinhood and other brokers, said of Mr. Tenev has helped revolutionize online trading for a younger generation with an app that makes investing easy and fun, his start-up has repeatedly been ill prepared to deal with issues as commonplace as technology glitches and trading hiccups, they said. It was no surprise that Robinhood got caught unawares over the past week, current and former Robinhood employees and analysts said. Tenev told Elon Musk in an impromptu interview on the online conversation app Clubhouse that he knew that Robinhood’s trading curbs were “a bad outcome for customers.” He said the entire experience had been challenging, “but we had no choice in this case.” To increase that cushion and avoid further problems, Robinhood raised an emergency $1 billion last week, followed by an additional $2.4 billion this week. Tenev disclose that Robinhood had put in restrictions because it did not have enough of a cash cushion to hedge against the risky trades. The limits infuriated Robinhood’s users, who were locked out of the action, and the seven-year-old start-up was blasted by lawmakers and others, accused of acting unfairly toward ordinary investors.įor days, Robinhood was slow to fully explain why it had curbed people from trading the stocks.
Tenev, 33, is now in the hot seat again after Robinhood abruptly curtailed its customers’ trading last week amid a frenzy in stocks such as GameStop, which were driven sky high by an army of online investors.