Ken Griffin
Lucy Nicholson | Reuters
Ken Griffin, the billionaire CEO of the Citadel hedge fund, defended his $ 2 billion investment in Gabe Plotkin’s short seller Melvin Capital last month amid the height of the GameStop craze.
“No, I think Gabe Plotkin is one of the best investors of his generation,” Griffin told CNBC’s Andrew Ross Sorkin on Friday during the Squawk Box.
The comment was in response to a question from Sorkin about whether Griffin’s investment was a mistake because it raised questions about Griffin’s motivations to support Plotkin amid his battle with retail Reddit traders who were pumping GameStop’s shares.
“If I had to run my business with the possibility that an insane conspiracy theory could emerge at any time, I would have no business,” said Griffin.
In addition to managing the Citadel hedge fund, Griffin is the founder of the dominant market maker Citadel Securities, which handles about 40% of the U.S. retail stock order flow, including from brokers such as the free trading application Robinhood.
After news of the Citadel and Point72 investment was released, speculation abounded on social media platforms about Griffin’s possible role in the drama unfolding. In a now-deleted tweet, Twitch co-founder Justin Kan said he “got a tip” that Griffin may have been involved in Robinhood’s move to limit access to GameStop bulls.
Robinhood later explained that it was his clearinghouse, a behind-the-scenes market player called Depository Trust and Clearing Corporation, who demanded billions of dollars in collateral to support GameStop negotiations, forcing the broker to reduce its users’ access until could raise capital.
In the broad interview, Griffin also said that “there was no doubt” that the amount of short sales will be reduced thanks to the power that retailers powered by Reddit have demonstrated with GameStop.