- Robinhood co-CEO Vlad Tenev said the company “had no choice” in its controversial decision to suspend buying but still allow the selling of stocks like GameStop.
- The situation began last week when a group of Redditors largely drove an unprecedented spike in GameStop’s stock price in an attempt to cause major hedge funds like Melvin Capital to lose billions.
- Tenev said Robinhood made the decision to restrict buying because the exponential surge in stock prices resulted in a $3 billion deposit bill from the National Securities Clearing Corporation. Meanwhile, Robinhood had only $2 billion in venture capital.
- “We want to give people the access, so that’s been very, very challenging,” Tenev said Sunday night, “but we… had to conform to our regulatory capital requirements.”
- Tenev added that Robinhood still allowed shares of GameStop to be sold because “people get really pissed off if they’re holding stock and they want to sell it and they can’t, so I think that’s categorically worse.”
Robinhood CEO Explains GME Buying Ban
Since the end of last week, Robinhood co-CEO Vlad Tenev has appeared in numerous interviews in an attempt to explain and justify why his company chose to restrict users from buying new shares of stocks for GameStop, AMC, and more.
“We want to give people the access, so that’s been very, very challenging,” Tenev told Tesla CEO Elon Musk in an exchange on the audio app Clubhouse Sunday night, “but we had no choice in this case. We had to conform to our regulatory capital requirements.”
Part of the reason Robinhood’s decision has been so heavily criticized is because the company still allowed users to sell off their existing shares of those stocks. In essence, that appeared to favor large hedge funds over everyday investors.
“We got a lot of questions about, ‘Okay, you had to restrict buying; why didn’t you also restrict selling?’” Tenev told Musk. “And the fact of the matter is people get really pissed off if they’re holding stock and they want to sell it and they can’t, right? So I think that’s categorically worse.”
While other brokerages also restricted stocks amid an unprecedented surge largely driven by a group of Redditors from the subreddit WallStreetBets, Robinhood’s decision was particularly singled out because many viewed it as abandoning the company’s mission of “democratiz[ing] finance for all.”
In addition to that, many have accused Robinhood of bowing to pressure from hedge funds that it has a relationship with — including Citadel Capital, which helped pump $2.75 billion into the hedge fund Melvin Capital last week after it lost billions from its position in GameStop.
Tenev has now denied this claim multiple times, but nonetheless, criticism has continued.
“Robinhood is supposed to be steal from the rich give to the poor — that’s the story of Robinhood,” podcast host Joe Rogan said on his show over the weekend. “Instead, they are protecting all these hedge fund people and stopping people from doing this.”
For his part, Tenev said the decision was made because the surge in stocks like GameStop resulted in a massive deposit bill from the National Securities Clearing Corporation. While the process is fairly complex, brokerages like Robinhood must make initial deposits to clearinghouses when investors buy stocks.
That deposit, according to Tenev, spiked to $3 billion in the midst of GameStop’s volatility, creating a sizable problem for Robinhood since it had only raised $2 billion in venture capital.
“That essentially explains why we had to mark these symbols position-closing only, and also why we knew this was a bad outcome for customers,” Tenev said. “You know, part of what’s been really difficult is Robinhood stands for democratizing access for stocks.”
In his exchange with Musk, Tenev said Robinhood eventually managed to negotiate that requirement down to $700 million.
Robinhood Eases Trading Limits
Monday morning, Robinhood increased the number of new GameStop shares that users can buy from one to four.
Previously on Friday, Robinhood announced that it would back off from its “no-buy, only-sell” policy and would allow limited trading of GameStop; however, that meant users were restricted to only one new share each.
Robinhood also included 49 other companies on that list — including American Airlines, AMC, and even Starbucks. Sunday, Robinhood backtracked by reducing that list to eight stocks — with AMC and GameStop still among the affected.
While users were restricted from buying more than one new share of GameStop at the time, they could now buy up to 10 new shares of AMC.
See what others are saying: (CNN) (CNBC) (Business Insider)
Google Is Banning “Sugar Dating” Apps as Part of New Sexual Content Restrictions
The change essentially targets apps like Elite Millionaire Singles, SeekingArrangements, Spoil, and tons of other sugar dating platforms.
Sugar Dating Crackdown
Google has announced a series of policy changes to its Android Play Store that include a ban on sugar dating apps starting September 1.
The company’s Play Store policies already prohibit apps that promote “services that may be interpreted as providing sexual acts in exchange for compensation.”
Now, it has updated its wording to specifically include “compensated dating or sexual arrangements where one participant is expected or implied to provide money, gifts or financial support to another participant (‘sugar dating’).”
The change essentially targets apps like Elite Millionaire Singles, SeekingArrangements, Spoil, and tons of other sugar dating platforms currently available for download.
What Prompted the Change?
The company didn’t explain why it’s going after sugar dating apps, but some reports have noted that the move comes amid crackdowns of online sex work following the introduction of the FOSTA-SESTA legislation in 2018, which was meant to curb sex trafficking.
That’s because FOSTA-SESTA created an exception to Section 230 that means website publishers can be held liable if third parties are found to be promoting prostitution, including consensual sex work, on their platforms.
It’s worth noting that just because the apps will no longer be available on the Play Store doesn’t mean the sugar dating platforms themselves are going anywhere. Sugar daters will still be able to access them through their web browsers, or they can just sideload their apps from other places.
Still, the change is likely going to make the use of these sites a little less convenient.
See what others are saying: (The Verge)(Engadget)(Tech Times)
Activision Blizzard CEO Apologizes for “Tone Deaf” Response to Harassment Suit, Unsatisfied Employees Stage Walkout
Organizers of a Wednesday walkout say they “will not return to silence” and “will not be placated by the same processes that led us to this point.”
After a week of growing criticism against its workplace culture, the CEO of Activision Blizzard has finally apologized for how the company first responded to allegations of sexual harassment and assault in its offices.
“Our initial responses to the issues we face together, and to your concerns, were, quite frankly, tone deaf,” CEO Bobby Kotick said Tuesday in a letter to employees. “It is imperative that we acknowledge all perspectives and experiences and respect the feelings of those who have been mistreated in any way. I am sorry that we did not provide the right empathy and understanding.”
In its initial response, Activision Blizzard denounced the disturbing allegations brought forth in a lawsuit by the California Department of Fair Employment and Housing (DFEH) as “irresponsible.” The company added that it came from “unaccountable State bureaucrats that are driving many of the State’s best businesses out of California.”
But many current and former employees soon disputed that claim. In fact, at the time, more than 2,500 had signed their name to an open letter condemning the company for its response, which they described as “abhorrent and insulting” to survivors.
In his letter, Kotick promised employees that Blizzard will take “swift action to be the compassionate, caring company you came to work for.”
As part of a series of new policies, he said the company will now offer additional employee support and listening sessions, as well as potential personnel changes to leadership.
“Anyone found to have impeded the integrity of our processes for evaluating claims and imposing appropriate consequences will be terminated,” he added.
Kotick also said Blizzard will add “compliance resources” to ensure that leadership is adhering to diverse hiring directives.
Lastly, he promised that the company will remove “inappropriate” in-game content. In a similar statement on Tuesday, Blizzard’s World of Warcraft team said it’s actively working to remove “references that are not appropriate for our world,” though it didn’t specify what those references were.
It now appears that many of the references being removed are of the game’s former Senior Creative Director, Alex Afrasiabi, who is cited in the lawsuit as someone who hit on and made unwanted advances at female employees. Moreover, the suit also directly accuses him of groping one woman.
“Afrasiabi was so known to engage in harassment of females that his suite” during company events “was nicknamed the “[Cosby] Suite” after alleged rapist Bill [Cosby],” the suit claims.
Organizers of a company-wide employee walkout, which was announced Tuesday and occurred Wednesday, still argue that Kotick’s latest message doesn’t address their larger concerns.
Among those are “the end of forced arbitration for all employees,” “worker participation in oversight of hiring and promotion policies,” “the need for greater pay transparency to ensure equality,” and “employee selection of a third party to audit HR and other company processes.”
“We will not return to silence; we will not be placated by the same processes that led us to this point.”
Ahead of the walkout, Blizzard reportedly encouraged its own employees to attend, saying those workers would face no repercussions and “can have paid time off” during the demonstration, according to The Verge.
Frito-Lay Workers End Nearly Three-Week Strike After Securing Higher Wages and a Guaranteed Day Off
Employees also negotiated an end to “suicide shifts,” which are two 12-hour shifts that are only eight hours apart.
Hundreds of Frito-Lay workers in Kansas have put an end to their nearly three-week strike over alleged mandatory overtime assignments that resulted in extremely long work weeks and so-called “suicide shifts.”
The term “suicide shift” refers to working two 12-hour shifts with only eight hours of rest in between. That can be especially hard on employees who claim to have worked up to 84 hours in a single week. For context, that’s 12 hours a day without a single day off.
One of the reasons workers have found themselves taking on more hours and days at plants is because consumer snacking has increased during the pandemic — so much so that Frito Lay’s recent net growth has exceeded every single one of its targets. That’s why at one point, the striking workers asked consumers to boycott Frito-Lay products in a show of solidarity.
The strikes began July 5 and concluded on July 23 following an agreement reached by union leaders and PepsiCo., Frito-Lay’s parent company. Under that deal, all employees will see a 4% wage increase over the next two years. They’ll also be guaranteed at least one day off a week, and the company will no longer schedule workers with only eight hours off between shifts.
Following the agreement, Anthony Shelton, the president of the union representing the workers, said that they’ve “shown the world that union working people can stand up against the largest food companies in the world and claim victory for themselves, their families and their communities.”
“We believe our approach to resolving this strike demonstrates how we listen to our employees, and when concerns are raised, they are taken seriously and addressed,” Frito-Lay said in a statement. “Looking ahead, we look forward to continuing to build on what we have accomplished together based on mutual trust and respect.”
The Long, Bitter Road to an Agreement
When the workers went on strike, they lobbed several very disturbing accusations against Frito-Lay.
In fact, the workers were pushed so hard that according to one employee who wrote in the Topeka Capital-Journal, “When a co-worker collapsed and died, you had us move the body and put in another co-worker to keep the line going.”
While Frito-Lay dismissed this account as “entirely false,” other employees continued to protest conditions in the plants. Many even argued the 90-degree temperatures they had to stand in to protest outside were preferable to the 100-degree-plus temperatures and smokey conditions in the factories.
During the strikes, PepsiCo. actively disputed that its employees are overworked, describing their claims as “grossly exaggerated” and saying, “Our records indicate 19 employees worked 84 hours in a given work week in 2021, with 16 of those as a result of employees volunteering for overtime and only 3 being required to work.”
It also said an initial concession more than met the striking employees’ terms, but the union backing those workers disagreed, and further negotiations were held until the final deal was reached.