A Wall Street titan connected to Robinhood’s notable feeding frenzy abruptly left Twitter on Friday night, when it was discovered that some of the board members of the companies involved profited from the surreal week.
Steve Cohen, the financier and owner of the New York Mets, which is worth about $ 14.6 billion, left Twitter on Friday.
Point72 Asset Management, Cohen’s company, a $ 19 billion hedge fund he founded in 2018, was sucked into the drama this week through his relationship with Melvin Capital, a hedge fund that made a big bet against GameStop.
Point72 already had about $ 1 billion under management with Melvin added $ 750 million to help stabilize Melvin this week when GameStop’s stock price skyrocketed, causing massive losses for Melvin.
Steve Cohen, a financier worth about $ 14.6 billion, was involved in the GameStop saga
Cohen had been debating the week’s negotiations with Dave Portnoy, founder of Barstool Sports
GameStop’s shares jumped 135 percent on Wednesday alone, and rose more than 1,700 percent this year after a Reddit forum, WallStreetBets, began to push the price largely through the Robinhood trading platform.
The increase affected some big investors, like Melvin, who bet against the shares.
Cohen, who bought the New York Mets in November, overtaking Jennifer Lopez and Alex Rodriguez to snap up the baseball team, was earlier in the week appearing to be enjoying a robust debate over roller coaster markets.
‘Rude crowd on Twitter tonight,’ Cohen tweeted Wednesday night. – Hey, the jockeys keep bringing.
On Thursday, Cohen got into a debate on Twitter with day trader Dave Portnoy, after blogger Barstool Sports attacked Cohen for restrictions on trading apps like Robinhood, which were hurting novice investors who were driving up the value of GameStop shares.
“Hey, Dave, what’s your problem with me,” Cohen tweeted back. – I’m just trying to make a living like you. I’m happy to take that offline. ‘
Portnoy finally tweeted: ‘At least you’re talking and trying to answer. This is appreciated. ‘
On Friday night, Cohen’s account was deleted.
Many regretted their departure from Twitter, having enjoyed their unusual interaction with Mets fans and unfiltered opinions.
“Give it to Steve Cohen, he didn’t announce too loudly that he needed a ‘social media self-care break’ before hanging up,” tweeted Laura Albanese, a Newsday sports reporter.
Others took a more comedic side, with a tweet: ‘It’s nice to see Steve Cohen honoring the Mets tradition of giving up after a few months.’
Traders, photographed on the New York Stock Exchange on January 9, had a wild week
Cohen’s rejection of social media came when it was revealed that others involved in the extraordinary week profited enormously from the situation.
Since January 1, executives at BlackBerry and GameStop have been selling shares, making a total of more than $ 22 million in shares.
The executives also received a big boost from amateur traders on social media, who offered shares in the companies.
Some have stated that it is their mission to divert Wall Street’s profits to ordinary people, but in doing so, they have inadvertently helped the company’s directors.
Steve Rai, Blackberry’s chief financial officer (left), and GameStop board member Kurt Wolf, profited from the increase in shares of their companies
Broker Robinhood has been the focus of interest in GameStop’s bullish stocks
Protesters gathered outside the New York Stock Exchange on Thursday night
Three BlackBerry executives last week withdrew nearly $ 1.7 million in company stock, CBS News reported.
One of the three, BlackBerry’s chief financial officer, Steve Rai, sold all of his shares in the company, although he has unearned options that could turn into shares in the future.
BlackBerry’s shares were trading at around $ 5.50 until Reddit’s board took it over, meaning that the trio’s shares would be worth about $ 700,000.
But the frenzy added $ 1 million to the combined value of its shares.
It was unclear how much of the $ 1.7 million went to Rai.
At GameStop, Kurt Wolf, a financial manager and former executive consultant who joined GameStop’s board last year, sold more than two-thirds of his shares in January.
The sale earned Wolf’s investment fund just over $ 17 million.
There is no allegation of undue negotiation of inside information in any of the negotiations.
Developments with financiers came about while Robinhood continued to restrict trade to small-scale investors.
On Thursday, Robinhood blocked the sale of certain shares and sold shares of users without permission – causing online uproar, protests on Wall Street and launching investigations by Congress and the New York attorney general.
Robinhood CEO Vlad Tenev, 33, defended his company’s stock on Thursday night.
Vlad Tenev defended his company’s stock in an interview on Thursday night
‘We had to make a very difficult decision. It was a challenging day, ‘Tenev told MSNBC.
Robinhood cited ‘recent volatility’ for the decision to prevent users from buying shares in GameStop and 12 other companies that Reddit users selected for ‘small pressures’.
The company needed to increase its cash reserve in order to do business. With the injection of extra cash, Robinhood said he would lift restrictions on certain stocks, which were limited on Thursday.
However, on Friday, Robinhood users were still limited.
Customers at the end of the day could only buy a single GameStop share, having managed to buy five at the start of the trade.
The stock trading app also expanded its list of restricted stocks from 13 earlier in the day to 50.
A ‘short squeeze’ happens when investors target a stock – in this case, GameStop, which has a high ‘short interest’.
Overdraft is when an investor basically makes a bet that a stock will fall. If it falls, the investor makes money. But a squeeze happens when another investor bets that the stock will go up. If enough investors do this, the stock price goes up and puts pressure on short positions – causing the investor who bets the stock to fall to lose money.
The company was hit by a class action lawsuit accusing it of allying itself with Wall Street by blocking investors’ ability to buy shares.