AMC Challenges Robinhood's Stock Token Backing Claims

AMC Entertainment CEO Adam Aron has challenged Robinhood's claim that its stock tokens are backed one-for-one by underlying equity shares. In a series of questions to Robinhood CEO Vlad Tenev and Chief Legal Officer Dan Gallagher, Aron asked whether the corresponding shares backing the tokens could be lent to short sellers.

Aron framed the scenario as hypothetical but questioned whether a token can still be described as backed one-for-one if its underlying share is lent out. He argued that this practice defeats the purpose of public share ownership and may lead customers to misunderstand the rights attached to stock tokens, which do not carry shareholder voting rights.

Roninhood's stock token model allows investors to gain economic exposure to a referenced security without holding direct ownership or voting power. The company issues these products through its offshore subsidiary, Robinhood Assets Jersey Limited, and they are currently unavailable to U.S. persons due to regulatory restrictions.