San Francisco – Vlad Tenev, Chief Executive of Online brokerage Robinhood, Have practiced damage control.
Last March, it told customers that “we owe it to you to do better” after Robinhood’s app was out for a long time, leaving many people unable to do business.
In June, He wrote in a blog post He was “personally devastated” and wanted to improve the “customer experience” after the age of 20, having given a negative loan of $ 730,000 on the app, which killed himself.
And in December, when federal regulators fined their company $ 65 million for misleading users, how did it make money, He said the allegations “Do not reflect Robinhood today.”
33-year-old Mr. Tenev is again in the hot seat Robinhood suddenly curbs its customers’ business Last week amid a frenzy in stocks like GameStop, which skyrocketed Army of online investors. The border affected Robinhood users, who were put out of action, and the seven-year-old start-up was blasted by lawmen and others accused of wrongdoing towards general investors.
For days, Robinhood was slow to fully explain why it had prevented people from trading stocks. Mr. Tenev later revealed that Robinhood had put in sanctions because it did not have enough cash pillow to defend against risky trades. Robinhood raised to raise that pillow and avoid further problems An emergency $ 1 billion Last week, after An additional $ 2.4 billion This week.
on Sunday, Mr. Tenev told Elon Musk In an Improptu interview on the online chat app Clubhouse he knew that Robinhood’s trade marks were “a bad outcome for customers”. He said the entire experience was challenging, “but we had no choice in the matter.”
Current and former Robinhood staff and analysts said it was no surprise that Robinhood was caught illegally during the past week. However, Mr. Tenev has helped revolutionize online trading for the younger generation, with an app that makes investing easy and fun, with their start-ups frequently reverting to technical issues in the form of technical glitches and trading hiccups. It is designed to deal with, he said.
Many start-ups go through increasing pain. Vijay Raghavan, an analyst at Forster Research, said that “there is a consistent pattern that poses a question whether he knows what is going on inside his company”, Vijay Raghavan, who covers Robinhood and other brokers.
Lawmakers and some users of Robinhood have also been harsh on the chief executive. Representative Alexandria Ocasio-Cortez, a Democrat from New York and Republican Senator Ted Cruz of Texas, has slammed Robinhood for its ability to freeze users to buy GameStop stock. Mr Tenev has agreed to testify about the issue in Congress on 18 February.
Even some of Robinhood’s biggest promoters have turned against Mr. Tenev. Barstool Sports founder and high-profile Robinhood supporter Dave Portnoy wrote on Twitter last week on a photo of Mr. Tenev: “Fraud, lies, scumbags.”
Robinhood, a privately held company in Menlo Park, California, refused to provide Mr. Tenev for an interview. But the chief financial officer, Jason Warnick, said Mr. Tenev had broad support internally.
“When I saw Vlad, there is no one else I want to be with,” Mr. Warnick said of the events of the previous week. “He raised us in an incredibly effective way.”
Venture capitalists who have supported Robinhood, which is valued at about $ 12 billion and likely to go public this year, also said they trusted Mr. Tenev. Rahul Mehta, a partner at venture firm DST Global, said that the pace with which Mr. Tenev raised the $ 3.4 billion emergency in the last few days “makes you believe people around the table and especially for Vlad.” . “
Mr. Tenev, who moved to the United States from Bulgaria when he was 5 and grew up in the Washington, DC, area, founded Robinhood in 2013 with Baiju Bhatt. The two met while studying mathematics at Stanford University.
After graduating from Stanford in 2008, Mr. Tenev attended the University of California, Los Angeles, to pursue a PhD. In Mathematics, but quit working with Mr. Bhatt. The pair initially owned two other business ventures, including a Wall Street trading firm.
But they were short-lived. Instead, in 2011, inspired by the Occupy Wall Street movement – which took aim at the power of the big banks – they began to talk about how to eliminate the highest brokerage fees for trading stocks for all “finances. How to democratize “. He named Robinhood after the English robber of legend who stole from the rich and gave it to the poor.
In particular, Mr. Tenev and Mr. Bhatt wanted an app that could be easily used by the younger generation. “People in my age group, millennials, were not reaching the markets and openly mistrusting the institutions that provide financial services,” Mr. Tenev said on CNBC in 2015.
Mr. Tenev and Mr. Bhatt, who were co-chief officers, simplified Robinhood. Users were able to start trading stocks with no more than iPhone app and at no charge. App too Made business looks like a game. A free share of stock was given to new customers after a scratch that looked like a digital version of a lottery ticket.
The men sought out famous investors such as actor Jared Leto and rapper Snoop Dogg. Two former employees said co-CEOs often appeared in Tesla Sport utility vehicles, one black and one white, in a matching office.
Inside Robinhood, Mr. Tenev was known as the cerebral coder in charge of the operation, said by six current and former employees, who spoke on condition of anonymity. He was known to sit at lunch with the staff to learn about his latest theories from books or science fiction. He said that Mr. Bhatt had more fun and attractive designs.
Both were active on social media, with Mr. Tenev filled with emojis, tweeting Mr. Musk while replying to the joke. Mr. Bhatt aired pictures of himself from floor seats at the Golden State Warriors basketball games.
As Robinhood quickly grew, however, the blunders did. in 2018, the company announced It will start offering bank accounts. But it did not seek approval from financial regulators, which is standard practice, which increasingly rebuked start-ups.
The same week, Robinhood released software that incorrectly reversed the direction of customer trades, which meant that a bet on a share was changed to a bet that it would go down. Mr. Tenev Oversaw Technique.
Technical issues are constantly coming to the fore. In 2019, customers discovered that Robinhood’s software accidentally allowed them to borrow an almost infinite amount of money to multiply their stock bets. Last March, as the epidemic hit the United States and the stock market grew wildly, Robinhood’s app remained seized for nearly two days, causing some customers to lose more than $ 1 million.
Then Mr. Tenev said in a blog post that “We owe it to you to do better”. By then, Robinhood had more than 13 million customers.
Mr. Warnick and other employees said that Mr. Tenev had a habit of remaining calm in difficult situations. “He doesn’t get emotional,” Mr. Warnick said.
But five current and former Robinhood employees said Mr. Tenev moved quickly to new projects without fixing previous problems. After the March results, he said, Mr. Tenev told the company that it would significantly increase its infrastructure and customer support. Yet nearly a year later, the start-up does not provide a customer service phone number unlike its rivals.
Robinhood did not respond to a request for comment on customer service issues.
Last year, Mr. Bhatt stepped in as co-chief executive after returning from paternity leave, leaving Mr. Tenev. Mr. Bhatt remains an executive and is on the board of directors of the company.
Robinhood’s technical outages have continued. Last month, the site went down 19 times and more than doubled that of Charles Schwab or Fidelity, according to data from web tracking company DowDector.
Mr. Tenev has recently kept a low profile. Last year, he said in a podcast interview that he keeps his phone out of his bedroom at night to avoid examination to check social media.
But over the last week, as Mania on GameStop Stock Raised and Robinhood was forced to react, Mr. Tenev had little choice but to take more steps. He has appeared on television at least eight times from the home’s least decorated room, where he lives with his wife and children.
In most appearances, Mr. Tenev used technical language and moved quickly to talk about Robinhood moving forward for another phase of expansion.
“It’s a standard part of practices in the brokerage industry,” he said Told yahoo finance Last Friday, mentioned the decision to temporarily halt some purchases. “We are very confident about our future.”
Kitty Bennett contributed to the research.