Robinhood CEO Defends Tokenized Stocks in Public Clash With AMC

A dispute over tokenized stocks moved from social media to television on Wednesday, with Robinhood CEO Vlad Tenev pushing back against AMC Entertainment CEO Adam Aron, who had accused Robinhood of tokenizing AMC shares without the company's blessing. Speaking on CNBC, Tenev argued that once a company goes public its shares become transferable property, and issuers do not control other companies issuing their own securities that reference those shares.

Robinhood's stock tokens are structured as debt securities issued by a separate entity and backed one-to-one by underlying shares. Tenev said the products give holders in more than 120 countries economic exposure to U.S. equities, including in markets without strong brokerage infrastructure, and that Robinhood Chain volumes have grown as users combine tokens with decentralized-finance products. One right does not carry over: token holders cannot vote on company matters, and Tenev offered no commitment on whether Robinhood will cast votes tied to the backing shares.

Needham analyst John Todaro, who turned more favorable on the stock after concluding in an Aug. 24 note that crypto markets had likely bottomed, called Robinhood Chain a potential long-term growth driver while cautioning that the firm launches products at breakneck speed, which could invite regulatory and legal challenges. Mizuho raised its price target to $140 from $130 on Wednesday and StoneX initiated coverage at Buy with a $170 target. Shares traded near $116.45, down 0.75%.