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Updated August 14, 2024You’re reading an excerpt of Great Founders Write, by Ben Putano, writer, entrepreneur, and book publisher. He’s the founder of Damn Gravity Media, a publishing house that inspires and educates tomorrow’s great founders. Purchase now for lifetime access to the book and on-demand video course.
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.
At the end of his Twitter thread, Vlad Tenev offered an “apology” of sorts:
We cannot control … the lightning-fast spread of information and misinformation that takes place on social media, and for that I am incredibly sorry to our customers and staff for this.
(Emphasis mine)
That statement is a perfect summary of everything that Robinhood did wrong on January 28.
Tenev and his team lacked urgency to help their customers manage the crisis. They failed to share visible, direct, honest, and helpful information that the public desperately craved. After ten hours of silence, when conspiracy theories filled the void, they blamed “the lightning-fast spread of information” and said it was out of their control.
Robinhood failed to lead—and write—with courage.
Could things have been different?
We know what Robinhood did wrong, but how should they have responded instead? Luckily, we don’t need to hypothesize.
Public.com is a commission-free trading platform, just like Robinhood. On January 28, they were also forced to freeze $GME and other stocks during the squeeze. But their response to the crisis couldn’t have been more different.
From their very first message, Public.com’s response to the Gamestop freeze was the exact opposite of Robinhood’s.