The CEO Who Lost 80% of His Company's Value (And Built It Back): Vlad Tenev

**Shane Parrish** (0:00)
I want to come to GameStop for a moment. You need billions in collateral. You make a decision to restrict the trading. How did you make that decision?

**Vlad Tenev** (0:09)
It was a situation which had no precedent.

**Shane Parrish** (0:12)
The narrative that came out was you were in bed with hedge funds.

**Vlad Tenev** (0:16)
A juicy falsehood is more powerful than a boring truth.

**Shane Parrish** (0:19)
What did you think of the movie Dumb Money when you watched it?

**Vlad Tenev** (0:22)
I didn't see the entire thing, but I did see the clips that I was in.

**Shane Parrish** (0:26)
Wait, come on, you haven't watched it.

**Vlad Tenev** (0:28)
I think what most companies suffer from is...

**Shane Parrish** (0:34)
I want to come to GameStop for a moment. So take me back to the moment your phone rings. You need billions in collateral, maybe set the scene for us, and you make a decision to restrict the trading. How did you make that decision?

**Vlad Tenev** (0:50)
I have very fuzzy recollection of that time. You know, sometimes you talk to...

**Shane Parrish** (0:58)
Trauma victims.

**Vlad Tenev** (0:59)
Or like... I've heard a lot from people that have many children, including myself. I have more than one. It's like... My wife says, you know, it's very... The pregnancy and the childbirth are very, very painful, but for some reason, I don't remember it. And then that's sort of like... Evolutionarily gives you the signal that you should do it again. And I think we're doing a... Yeah, I think... I was at this IPO roundtable at the SEC about making the IPOs great again. And with Robinhood Ventures, we're taking that fun public, so we're doing another IPO. I joked that... Yeah, it's kind of like that. The IPO process, I remember being painful. And I didn't like it, but I don't really exactly remember why, and now I kind of want to do it again.
But yeah, that's a big aside that has nothing to do with GameStop, other than... Yeah, that was a very challenging time. It was towards the end of COVID, and I felt like everyone was going a little bit crazy. They'd been cooped up at home for about a year without much human-to-human interaction. I think from a crisis management standpoint, it was very difficult to deal with, because we're doing these conference video calls with all these different stakeholders. The regulators weren't in office. And so, yeah, basically, what happened was we got this automated file in the middle of the night, and it had big numbers on it, right? It had big numbers that kept changing.
And it was a situation which had no precedent. And, you know, we had to make a tough call to put GameStop and a bunch of other companies on position closing only, which basically meant you couldn't open up new positions, take on more risk, for a period of about one day. So it wasn't even that long. But because there was this narrative that had taken over social media, this like viral narrative that it was the the retail investors taking down the hedge funds. And we were kind of the tool. People wanted to put, it was like a good versus evil thing. And I think what was just, what would have at any other time for any other stock been kind of an innocuous risk management decision to control our internal risk turned into Robinhood's on the side of the hedge funds colluding against the retail investor. And I think the fact that the name of the company was Robinhood made this like a juicy narrative to that continued to go viral. So remember in the beginning of the, in the middle of the night when I woke up, my phone was basically unusable because it was like those videos you see of what happens if a Kardashian turns off, do not disturb on their phone. It just is a constant buzzing thing. So that was, that was my morning. I was like, the phone is completely unusable. I can't even get on a Zoom call because there's just random people calling me, telling me to turn it back on, you know?

**Shane Parrish** (4:24)
Just to give people context a little bit, if they're unfamiliar with the situation, the narrative that came out was you were in bed with the hedge funds because the hedge funds were trying to close their short positions on a stock that was basically going parabolic.

**Vlad Tenev** (4:40)
Right.

**Shane Parrish** (4:41)
And it was an unprecedented situation. I've never seen it before anyway. I can't.

**Vlad Tenev** (4:47)
But you also… Yeah, it's never happened before.