Robinhood Markets Inc. (NASDAQ:HOOD) CEO Vlad Tenev clarified the nature of the company’s OpenAI token giveaway on Wednesday amid growing controversy about the nature of the equities.
What Happened: In an X post, Tenev talked about Robinhood’s recent crypto event, where it announced a limited “stock token” giveaway on OpenAI and SpaceX for eligible European customers.
“While it is true that they aren't technically ‘equity’… the tokens effectively give retail investors exposure to these private assets,” Tenev stated.
He further added that the giveaway is a precursor to “something much bigger” and that many private companies have expressed interest in joining the “tokenization revolution” since the announcement.
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Why It Matters: Robinhood unveiled a suite of products during its event in France for its European customers, the highlight of which was blockchain-powered tokenized equities of companies like OpenAI and SpaceX.
However, the novel initiative has run into controversy. OpenAI issued a statement clarifying that the tokens offered by Robinhood are not OpenAI equity and that the company has no involvement with Robinhood regarding the product. The Sam Altman-founded firm further cautioned its users, stating that any transfer of its equity requires company approval, which was not granted in this case.
Elon Musk, who was also one of the co-founders, called OpenAI’s equity “fake.”
The Securities Industry and Financial Markets Association, a trade group that represents the interests of financial institutions, urged the SEC to deny digital asset companies the opportunity to offer tokenized equities through specific exemptive relief and instead adopt an “open and transparent” process.
Price Action: Shares of Robinhood dipped 1.35% in after-hours trading after closing 6.12% higher at $97.98 during Wednesday’s regular trading session, according to data from Benzinga Pro. Over the last week, the stock has surged more than 17%.
HOOD demonstrated high Momentum and Growth scores as of this writing. Want to know how this compares to the highest-weighted stock in your portfolio? Go to Benzinga Edge Stock Rankings.
Photo: Bangla press / Shutterstock.
Read Next:
- What Are Stock Tokens And How To Trade Them? Robinhood’s New Offering Merges Owning Stocks With Blockchain Tech: Here’s How It Works
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
