Robinhood’s Stock Tokens Are Not Real Shares: Dividends Included, No Voting Rights
Robinhood CEO Vlad Tenev, responding to harsh criticism regarding AMC stock tokens, clarified that the product does not offer the same rights as real shares.
Robinhood CEO Vlad Tenev countered accusations from AMC Entertainment CEO Adam Aron, who claimed a “fake market” was being created for tokens tied to company shares. Speaking to CNBC, Tenev argued that he cannot control every financial product that references the shares of public companies.
Last week, Aron stated that his company had no involvement with Robinhood’s AMC-linked tokens and requested that the platform halt trading. The AMC CEO also threatened to take the matter to the U.S. Securities and Exchange Commission (SEC).
Tenev said that issuer approval should not automatically be required for Robinhood’s stock tokens. However, he noted that these tokens are not the underlying shares themselves, but separate financial instruments referencing the shares.
Robinhood tokens do not grant voting rights
According to Tenev’s statement, every Robinhood token is collateralized 1:1 with a real share. The token itself is not a share representing equity ownership, but is characterized as a debt security.
Through this structure, investors can receive dividends, but do not have voting rights associated with the underlying shares. It has not yet been disclosed how Robinhood will act regarding the votes of the shares it holds as collateral.
This distinction has fueled the debate over whether tokenized shares are equivalent to real stock ownership. Graham Rodford, CEO of digital asset exchange Archax, stated that moving a real share onto the blockchain is a different process than issuing a separate instrument that tracks that share.
Securitize CEO Carlos Domingo pointed out that an AMC-linked token trading pair was trading at approximately 60 times AMC’s reference share price. This example demonstrated that the price of thinly traded tokens can significantly decouple from the stock they are tied to.