Vladimir Tenev’s name had remained in relative obscurity until the infamous GameStop short squeeze of 2021. This incredible math student from Bulgaria had helped launch a company that seemed to betray its users and its values during the months of January and February in 2021.
Now, folks know Tenev as a high-profile player in that dramatic GameStop event. He bears striking similarities to Gabe Plotkin, another young maverick in the financial world whose seven-year-old company, Melvin Capital, came under scrutiny during the short squeeze.
Tenev has been very willing to speak with others to clear Robinhood’s name, participating in interviews with some of the biggest names in the country. When Elon Musk and Dave Portnoy are conducting an interview in which they’re asking the questions, you know that interviewee must be a big deal.
Like Plotkin, Tenev is also in his mid-thirties It is not completely clear what year he was born in, but regardless of that, he’s still stunningly young to have such a staggering net worth, which we’ll discuss a little later. But first, how did he achieve it? Read on to discover how this young man from a seaside city became one of the most talked-about figures in the financial world.
A Star Student From the Beginning
Around 1989 or 1990, Vladimir Tenev’s parents migrated with him from his birthplace of Bulgaria to the United States. His parents were both employees of the World Bank, which gives loans and other assistance to governments in countries that are in need of financial relief. The overall goal of the World Bank is to reduce poverty across the globe.
While his parents worked in the industry he would one day shake up, Tenev was attending the Thomas Jefferson High School for Science and Technology in Virginia. After high school, he pursued the study of mathematics, earning his degree from Stanford University.
Tenev then began to continue his education at UCLA. His plan was to earn a Ph.D. in mathematics there. However, he was becoming more interested in working with a friend he’d met at Stanford, Baiju Bhatt. Instead of completing his Ph.D., Tenev decided to drop out of the program to pursue some ideas he and Bhatt were working on.
By 2010, Tenev and Bhatt’s plans were starting to come to fruition. In 2010, they launched Celeris, a high-frequency trading company and their first venture into business. They scrapped that project, and instead launched Chronos Research in 2011. This new company sold low-latency software to banks and trading firms. However, they were still two years away from the launch of the company that would make them billionaires.
The Story of Robinhood
Tenev and Bhatt founded Robinhood together back in 2013. Using their experience from Celeris and Chronos Research, this new high-frequency trading platform came with a mission: To help people of all financial means access and benefit from the stock market.
On Robinhood, early users (who were typically in their mid-twenties), could make commission-free trades of stocks and other funds. As the years went by, Tenev and Bhatt tweaked the product so that users could trade and earn money even faster. By 2017, Robinhood had completed $30 billion in trades.
Robinhood disrupted the hierarchy of companies in the financial world very quickly. Many major brokerage firms announced in 2019 that they, too, would not charge users trading fees. Robinhood was taking over their business, and they had to start rethinking their strategies if they hoped to keep up.
While Robinhood has not been without its fair share of controversy in the eight years it’s been around, it’s still one of the most prominent and groundbreaking financial services we have today. That’s why Robinhood’s role in the 2021 GameStop short squeeze was such a major event.
The practice of short selling lets investors profit off a stock that’s decreasing in value. A “short squeeze” is a rapid increase in the price of a stock that happens when too many folks are short selling it.
When the Reddit community r/wallstreetbets successfully coordinated to drive up the price of GameStop stock in defiance of institutional investors in early 2021, Robinhood was suddenly all over the news. But why?
Robinhood Restricted the Reddit Efforts
Many viewed Reddit’s shifting of the stock market as an impressive feat by a group of underdogs that are against unfair manipulation by larger financial entities. This is why folks were so angry when Robinhood, whose business model has always seemed to appreciate the little guys over the corporate giants, seemed to take a different stance.
In the face of the GameStop short squeeze, Robinhood restricted users from treading certain stocks. This move seemed to place them on the side of the hedge funds who had been short selling the stock and manipulating the market.
No one held back from sharing their negative opinions on Robinhood’s decision. Politicians including Alexandria Ocasio-Cortez, Rashida Tlaib, and Ted Cruz were in agreement that Robinhood was participating in market manipulation by trying to stop the effort by Redditors and others to challenge short selling by hedge funds.
Elon Musk was another big name who disagreed with Robinhood’s decision in this case. In fact, Musk and Tenev linked up for a discussion on another young app, Clubhouse, in late January of this year. Musk said to Tenev, “Spill the beans, man. What happened last week? Why couldn’t people buy the GameStop shares? The people demand an answer, and they want to know the details and the truth.”
Tenev explained to Musk that Robinhood did not have enough venture capital to make the deposit requirement of $3 billion that the National Securities Clearing Corporation demanded.
“There was a rumor that Citadel or other market makers kind of pressured us into doing this, and that’s just false,” Tenev told Musk.
Dave Portnoy of Barstool Sports followed in Musk’s footsteps by conducting his own interview with Tenev in February. While Musk kept his grilling somewhat lighthearted, Portnoy made clear to Tenev from the start that he did not like Robinhood’s behavior during the GameStop short squeeze.
“Ok, Vlad, you know everybody here who’s watching this hates your guts, right?” Portnoy said, referencing the audience members tuning in to their livestream.
“That’s what I hear,” Tenev laughed.
“I put in money the day that you stopped the trading–a lot of people did,” Portnoy said. “You very clearly say it’s not a liquidity issue. And then, as things continue, it seems to be a liquidity issue…For me, that seems like a clear 180…do you view that as a complete 180?”
“I think boiling it down to a liquidity issue both oversells it and undersells it,” Tenev replied.
He continued to say that Robinhood’s temporary restrictions against trading GameStop stocks was a consequence of a flawed financial system. He insisted that the Robinhood restrictions were not a betrayal of Robinhood’s original values, but a forced hand by the powers that be on Wall Street.
“Do you regulate trading?” Portnoy asked Tenev.
“No–we did this because we had to comply with our capital requirements. If we had a bunch more headroom, we probably would have let things continue.”
“Isn’t that the essence of liquidity? Are you afraid to say the word ‘liquidity?'”
“Most brokers restricted trading in these stocks to some degree or another, ranging from increasing the margin requirements all the way to marking the stocks themselves,” Tenev went on. “This actually showed a deep, systemic vulnerability in the financial system…a lot of the activity was happening on [Robinhood], so certainly we were a part of it…I’m not going to violate my regulatory requirements and risk a bigger issue, even though I obviously want people to keep trading what they want to trade. But we have to follow a very strict set of rules. We can ask for the rules to evolve and be changed.”
Portnoy was not convinced of Tenev’s authenticity, and neither were many one-time users of Robinhood. However, others believe that Tenev and Bhatt were truly just caught up in the webs of the financial system at large, and that they have not betrayed their allegiance to the little guy.
Vlad Tenev’s Net Worth
Whatever you think about Robinhood’s actions during the GameStop incident, they are still doing amazing things in the stock world, and their valuation reflects their rising popularity. Business of Apps crunched the numbers to see just how successful Robinhood really is. They found that after facilitating about $350 million in trades in 2020, Robinhood ended that year with a valuation of about $11.7 billion. Although we don’t yet know how many millions in trades they’ll facilitate this year, their valuation has already risen since 2020. It is now about $20 billion.
As for the co-founder and CEO of Robinhood, Tenev has a jaw-dropping net worth, especially for someone who’s not yet 40. He and Bhatt both crossed over the billion-dollar threshold in 2020, and Tenev’s net worth is still floating around $1 billion. The two co-founders each own a 10% stake in the company.
Vlad Tenev keeps his personal life relatively private, but we do know he has one child. Time will tell if Robinhood will remain a powerhouse in the world of trading, or if the GameStop controversy will hinder their growth. Either way, Tenev the math wiz and his co-founder Bhatt are sitting pretty as a billionaires.