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Robinhood Markets Inc. will likely suffer collateral damage as a result of its recent turmoil when it debuts on the public market, but co-founder and CEO Vladimir Tenev should maintain control.

The Menlo Park, California-based trading-app developer found itself in the middle of controversy last week after restricting trading in a number of highly volatile companies that were the target of a short squeeze. The decision enraged customers and resulted in the company scrambling to raise cash.

Vlad Tenev, co-founder and co-CEO of Robinhood (REUTERS/Brendan McDermid)

Robinhood has shelved plans to go public, as FOX Business reported, during the first quarter of this year, a move that was expected to fetch a valuation in excess of $20 billion. The company was in September valued at $11.7 billion on the private market.

“Part of the valuation is math and part of it is pixie dust, and the pixie dust part might suffer a little bit,” said Bradley Tusk, CEO of the New York-based venture capital firm Tusk Holdings.

Robinhood continues to adjust trading parameters in heavily shorted stocks, first announced last week for GameStop Corp. and others after a surge in volume strained its ability to meet clearinghouse deposit requirements and resulted in the company raising $4 billion — more than the company had previously accumulated in its nearly eight-year existence.

The decision to restrict trading sparked outrage among users who theorized the company was colluding with hedge funds, including Citadel, who were short highly volatile stocks including GameStop. Citadel and Point72 Asset Management last week injected a combined $2.75 billion into the hedge fund Melvin Capital after its bets against GameStop and other companies soured.

Users also pointed out that Robinhood was going against its mission of giving everyone access to financial markets.

The turbulence at Robinhood, however, is unlikely to result in the removal of Tenev – at least until after the company goes public, according to Tusk.

Typically founders have “really strong control on things like voting rights,” he said, adding that Tenev has done a “pretty amazing job.” His co-founder Baiju Bhatt operates behind the scenes.

In Tusk’s mind, the key to Tenev’s survival at Robinhood will be how he is able to craft a counternarrative to what caused the company to take the action that it did.

The company has already begun its damage control, which included an opinion piece in USA Today, as well as sending an email to customers on Monday explaining why they were restricted from making some trades.

“We had to take steps to limit buying in those volatile stocks to ensure we could comfortably meet our deposit obligations,” the company said. “We didn’t want to stop people from buying stocks and we certainly weren’t trying to help hedge funds.”