A public company typically has limited control over third-party financial products that reference its shares, but Robinhood Markets, Inc. (NASDAQ:HOOD) and AMC Entertainment Holdings, Inc. (NYSE:AMC) are now testing that notion in public, in one of the year’s most intense corporate spats. The debate revolves over stock tokens and has evolved from a heated social media post on September 3 to a live televised retort by September 9.
An Escalating Public Feud
Robinhood Markets, Inc. expanded its tokenized shares offering, which is issued through a unit named Robinhood Assets (Jersey) Limited and traded on Robinhood’s proprietary blockchain, Robinhood Chain, to include over 190 public firms, including AMC, without the companies directly signing on. When AMC CEO Adam Aron discovered that his company was among them, he did not mince words. On September 3, Aron posted on X, calling the practice “contemptible, outrageous, disgusting, detestable, inexcusable, vile,” questioning how it could possibly be legal, and stating that AMC Entertainment Holdings, Inc. had no relation to the tokens and did not condone them.
He stated that the company would retain independent securities counsel and vowed to take the matter to the SEC, characterizing Robinhood’s tokens as an unregistered securities product that undermines the regular relationship between a public company and its shareholders.
The market reaction was fast and telling: AMC shares rose as much as 21% in overnight trading after the public dispute broke out.
Robinhood Pushes Back
Robinhood did not back down. In the days that followed, the company’s chief legal officer, Dan Gallagher, a former SEC commissioner, mocked the tone of Aron’s complaint on social media, saying Robinhood “know[s] a little something about the US securities laws,” and inviting AMC’s lawyers to contact them. CEO Vlad Tenev originally commented on X with a brief “What’s the concern?” before making his first extensive, broadcast comments on the controversy in a CNBC “Squawk Box” interview on September 9.
Tenev contended that a public company owns the rights and obligations associated with its own shares, but not the securities created by other companies that simply reference those shares. In his words, issuers “don’t control everything,” therefore shouldn’t be required to assent to products like Robinhood’s tokens.
A Broader Notion About Modernizing Markets
Aside from the AMC dispute, Tenev has posted a broader defense of tokenization as a concept, arguing that traditional market infrastructure, with its fixed trading hours, closed networks, and multiple layers of proxies, wasn’t designed for a world of constant trading, self-custody, and composability. He has already urged US regulators to modify laws governing tokenized stocks so that American markets don’t fall behind other countries experimenting with the technology.
Smart Money Sentiment
Institutional positioning rose for both companies heading into the dispute. Robinhood Markets, Inc. saw hedge fund count rise from 84 funds in the first quarter to 87 in the second. AMC Entertainment Holdings, Inc. saw a sharper increase, with hedge fund ownership rising from 20 funds to 33 over the same period.
What’s Actually At Stake
The legal question at the heart of the dispute remains unresolved: Robinhood’s stock tokens are structured and marketed as debt securities issued by a Jersey-based entity, are explicitly not registered under US securities law, and are restricted from sale to US persons. Robinhood argues that because the tokens are separate securities that merely reference AMC shares, it does not need AMC’s permission to offer them. AMC’s counterargument is less about legal technicality and more about control and reputational risk: the company claims it spends heavily on SEC compliance and disclosure obligations as a public company, while Robinhood’s Jersey-based issuing entity can create tradable exposure to AMC shares without granting investors the ownership rights that come with the underlying stock.
Insider Monkey’s Bottom Line
This debate is unlikely to be limited to AMC Entertainment Holdings, Inc. and Robinhood Markets, Inc.. With over 190 companies included in Robinhood’s tokenized offering without individual authorization, any regulatory or legal conclusion here might set a precedent for how other public companies react to similar synthetic products carrying their names. Investors should keep an eye on whether AMC takes official SEC engagement or legal action, since it will be the clearest indication of whether this disagreement progresses from public sparring to an actual regulatory test case for the legality of non-consensual stock tokenization.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years
