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All of Robinhood’s missteps were exacerbated by communication that sounded like it was written by legal. (It probably was.) Here’s one of the more obtuse statements from Tenev’s Twitter thread on January 28:
As a brokerage firm, Robinhood has many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment.
Using legal-approved jargon like “volatility” and “current environment” raised more questions than answers for Robinhood users. Tenev’s worst offense was refusing to mention the stock at the heart of the entire crisis, Gamestop, as if uttering the name would open them up to legal action.
As a platform for the people, Robinhood failed to communicate like a real person. Instead they opted to hide behind corporate jargon and legal-washed messaging.
Desperate Robinhood customers needed answers about their $GME stock. When would the freeze be lifted? What would happen next?
Ten hours after the freeze, Tenev offered some painfully vague next steps in his Twitter thread. He said Robinhood would open up limited sales of $GME and other stocks the next day. But what did “limited” mean, exactly? And could Robinhood freeze the stock again?
Robinhood failed to give any more direction to their customers or the public. This led anxious users to seek out new leaders—folks like Dave Portnoy, the founder of Barstool Sports, who called for the imprisonment of Tenev and his hedge fund overlords on social media. His position may have been extreme, but at least he gave his followers hope for a resolution.