Robinhood 's CEO criticized the "runaway chain reaction" of short-selling the same shares multiple times.- "That's a lot of what causes this short-squeeze dynamic to begin with," he told
DealBook 's conference. - There's an argument to be made that the same share should be shorted only once, he said.
"If you
Tenev said many market participants don't fully understand the "plumbing" of the financial system, but there is now more eagerness to understand the concepts of short-selling and payment for order flow.
"How many times should we let the same share be shorted? I think there's an argument that the answer should be one," he told host Andrew Ross Sorkin. "If you short sell the same share hundreds of times, I don't know if people have really studied the effects of that and how things would be different if there was some limitation."
Tenev was joined at the DealBook session by former
Robinhood came under fire last month for temporarily blocking trades of volatile equities including GameStop, AMC, and Nokia, following a Reddit-fueled buying frenzy. The
In his remarks to Congress last week, Tenev denied blocking purchases at the request of hedge funds and called to modify SEC trading rules. He asked the committee to consider settling trades in real-time, in order to allow investors to make purchases faster and allow brokers to clear up proprietary cash.
Robinhood is now expanding its live phone support after the company's lack of customer assistance came under fire at the Congressional hearing.