 Hello, welcome once again. Before we get into this video, just take a moment and hit that like button, subscribe, and since that doesn't do much on its own, make sure to hit that bell icon as well. As you may or may not have heard by now, Elon Musk had the opportunity to speak with the CEO of Robinhood, who Musk at one point refers to as Vlad the Stock and Paylor. But anyway, he was able to ask some tough and entertaining questions. Now I want you to watch the portion of this interview that I edited down to the informative and funny bits, but afterwards, I highly recommend that you head on over and watch the full video. As always, the link to the full video and the Tesla Doshas channel will be in the pinned comment and description. Hey guys, thanks for inviting me up. It's good to hang with all of you. All right Vlad, what really happened? Give us the inside scoop. All right, well I was actually hoping that you would invite me up for the Fermi Paradox part, because this has been a very surreal weekend and week for me. One of the really great things is all the people coming out of the woodwork to offer support for the company, offer advice. So I got introduced today, and actually I should say I just randomly downloaded Clubhouse a couple of days ago just to see what it was all about. So this is my first time literally using the app. But yeah, I got introduced to your friend Antonio Elon who had some good advice for me and then introduced me to you. You had some great advice. And then I figured, you know, I heard about this clubhouse and this has got to be part of the simulation. So I just thought, why not? So here I am. So I'm actually an adherent to the simulation hypothesis. All right, well, it's full of beans, man. What happened last week? Why can people buy the GameStop shares? The people demand an answer and they want to know the details and the truth. Yep, yep. Okay, so let me start by giving a little bit of background. So I'm the chief executive of Robinhood. Robinhood is actually a, I'll go through this quickly. Don't worry, this is important. It's actually a couple of companies. So there's an introducing broker dealer called Robinhood Financial. And that basically is the app that you know and love. It processes trades. You're a customer of Robinhood Financial. Then there's a clearing broker dealer, Robinhood Securities, that clears and settles the trades. And then we have Robinhood Crypto, which is our crypto business, all of which, all of these are kind of different entities that are differently operated. So basically Wednesday of last week, we just had unprecedented volume, unprecedented load on the system. A lot of these so-called meme stocks were going viral on social media. And people were joining Robinhood. And there was a lot of net buy activity on them, as you guys all know. And Robinhood at this time, I think was number one on the iOS app store. And pretty close, if not number one on Google Play as well. So just unprecedented activity. And so Thursday morning, so I'm sleeping. But at 3.30 a.m. Pacific, our operations team receives a file from the NSCC, which is the National Securities Clearing Corporation. So basically as a clearing broker, and this is where Robinhood Securities comes in, we have to put up money to the NSCC based on some factors, including things like the volatility of the trading activity, concentration into certain securities. And this is the equities business. So it's based on stock trading and not options trading or anything else. So they give us a file with the deposit, and the request was around $3 billion, which is about an order of magnitude more than what it typically is rent. So why was that so high? It sounds like this is an unprecedented increase in demand for capital. What formula did they use to calculate that? Well, yeah, and just to give context, Robinhood up until that point has raised a little bit around $2 billion in total venture capital up until now. So it's a big number, like $3 billion is a large number, right? So basically the details are, we don't have the full details. It's a little bit of an opaque formula, but there's a component called the VAR of it, which is value at risk. And that's based on some fairly quantitative things, although it's not fully transparent. So there are ways to reverse engineer it, but it's not publicly shared. And then there's a special component, which is discretionary. So that kind of acts as a multiplier, and basically... Discretionary meaning it's just their opinion. Yeah, it's a little bit, I mean, I'm sure there's definitely more than just their opinion, but basically... Well, I guess whatever everyone wants to know is like, did something maybe shady go down here? It seems weird that you'd get a sudden $10 billion demand, $3 billion. Sorry, how much? Yeah, it was $3 billion US dollars. Okay, $3 billion around, just suddenly out of nowhere. And what percentage... I wouldn't impute shadiness to it or anything like that. And actually the NSPC was reasonable, subsequent to this, and they've been, they worked with us to actually lower it. So it was unprecedented activity. I don't have the full context about what was going on in what's going on in the NSCC to make these calculations, but yeah, essentially it was a large number. Is anyone holding you hostage right now? Oh, no, no, I'm okay. Yeah, thanks for asking. But anyway, so... Will there be any limits? Well, I think there's always going to be some theoretical limits, like we don't have infinite capital, right? And on Friday there were limits. So there's always going to have to be some limit. I think the question is, you know, will the limits be high enough to the point where some, they won't impact 99.9 plus percent of customers. So if someone were to deposit $100 billion and decide to trade in one stock, like that, that wouldn't be possible. All right. All right, well, I guess people really just want to know, if you had no choice, then you had no choice. I was going to have a situation and, you know, then that's understandable. But then who would put that gun to your head should, you know, be willing to answer the public. Yeah, listen, and, you know, I know there's processes. This is unprecedented times. And to be fair to those guys, they've been reasonable. So we are, I think the one thing that is maybe not clear to people is Robin is a participant in the financial system. So we have to work with all of these counter parties. So we do get a lot of questions about, you know, why do you work with market makers? Why do you work with clearing houses, vertically integrating and getting, I mean, it's hard enough to build a introducing and a clearing broker dealer. Not too many people have done that, but the financial system that allows customers to trade shares is sort of a complex web of multiple parties. And, you know, it's hard to, I think everyone says it could be better. It could be improved. It's just the necessity of trading equities in the U.S. that you have to do all these things. I mean, to what degree are you beholden to Citadel? I mean, like basically if Citadel is unhappy, then what happened? Yeah, so that, you know, there was a rumor that Citadel or other market makers kind of pressured us into doing this. And that's just false, right? Market makers execute our trades. They execute trades of every broker dealer. You know, this was a clearing house decision, and it was just based on the capital requirements. So, from our perspective, you know, Citadel and other market makers weren't involved in that. But wouldn't they have a strong say in who got put in charge of that organization since it's an industry consortium, not a government consortium or not a government regulatory agency? Um, I don't have any reason to believe that. I think that's just like, you know, then you're getting into kind of the conspiracy theories a little bit. So, I just have no reason to believe that that's the case, you know. Okay.