Key Points
AMC CEO Adam Aron criticized Robinhood for its tokenized stocks and demanded that the company stop the trading of AMC stock tokens.
Robinhood CEO Vlad Tenev responded to Aron on X by asking what the concern was.
Aron said marketing a security posing as AMC that does not comply with U.S. securities laws decouples token ownership from capital raising.
CEO spats are rare but there’s one brewing between the bosses of AMC Entertainment and Robinhood Markets.
AMC’s Adam Aron criticized the online trading platform for its tokenized stocks and demanded that the company stop the trading of AMC stock tokens. “I find this practice to be contemptible, outrageous, disgusting, detestable, inexcusable, vile,” he wrote in a post on X.
It seems to have piqued interest in AMC stock. The shares jumped around 6% ahead of the open and it was by far the most actively traded stock in premarket trading. Robinhood stock fell 1.9%.
“What’s the concern?” Robinhood CEO Vlad Tenev replied to Aron.
Robinhood gives investors outside the U.S. the opportunity to “trade and own 190+ Stock Tokens linked to companies and ETFs, including Nvidia, Google, Apple and Invesco QQQ,” according to its website. The tokens are tokenized debt securities issued by the company’s subsidiary Robinhood Assets (Jersey) Limited. They give investors economic exposure to the underlying securities but no beneficial rights of being a shareholder.
They are not registered under U.S. securities laws and can’t be sold in the U.S. Instead they offer investors outside the U.S. exposure to American stocks. Robinhood launched tokens in the European Union in June last year.
Aron said that marketing a security “sort of posing as AMC in some shape or fashion,” that doesn’t comply with U.S. securities laws was “shocking and shameful.”
“Your setting up of some kind of fictitious synthetic equity market decouples stock token ownership from a company’s ability to control its own capital raising efforts,” he said, adding that it also deprives investors of their rights.
Tenev is yet to come back to Aron and Robinhood did not immediately respond to a request for comment for Barron’s early Friday.
But this row, and wider debate, is far from done.