AMC stock price drops 20% as Tesla’s Elon Musk grills Robinhood CEO Tenev over trading restrictions

Shares of AMC Entertainment (NYSE: AMC) are trading about 5% higher on the day after failing to sustain gains of nearly 30% from earlier in the session. 

Fundamental analysis: Musk grills Tenev

Elon Musk, the CEO of Tesla and the world’s richest person in the world, acted on the behalf of millions of outraged customers of Robinhood by grilling the company’s CEO of the last week’s developments. 

Speaking on the audio-streaming app Clubhouse, Musk used the opportunity to ask Vlad Tenev a series of questions on the behalf of retail investors.

“Spill the beans, man — what happened last week?” asked Musk at the beginning of the conversation. Tenev replied that his business was asked by the National Securities Clearing Corporation (NSCC) to deposit $3 billion amid extremely high volatility on Wednesday.

“Just to give context, Robinhood, up until that point, has raised … around $2 billion in total venture capital up until now. So it’s a big number,” Tenev argued.

After a few hours, Robinhood managed to convince the clearinghouse to significantly decrease this deposit number to $700 million, which was ultimately deposited.  

“What 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, you know, at three in the morning,” said Musk, before getting corrected on the amount. 

Tenev in the end admitted that the decision to limit trading on certain securities, including GameStock and AMC, has represented a “bad outcome for customers”.

Technical analysis: Shares fall

AMC stock price initially traded nearly 30% higher on the day on Monday before taking a shart rotation lower to now trade just below the $14.00 mark, or about 5% in the green on the day. 

AMC stock daily chart (TradingView)

The company’s stock gained over 525% in January to trade above $20 at one point over the course of the last week. The nearby support is located at $11.50 – $12.50. On the upside, the AMC share price struggled to stay above $17, likely marking an intraday resistance zone. 

Summary

Elon Musk grilled Robinhood CEO Vlad Tenev over the last week’s developments while the AMC stock price fell after it had opened the new trading week higher. 

The post AMC stock price drops 20% as Tesla’s Elon Musk grills Robinhood CEO Tenev over trading restrictions appeared first on Invezz.