A real-life GameStop crash between Wall Street and Main Street broke out Thursday between hedge fund billionaire Steve Cohen and day-trading poster boy Dave Portnoy.
The comings and goings started when Portnoy, founder of the blog site Barstool Sports, criticized Cohen, the billionaire owner of Mets, for restrictions on trading apps like Robinhood, which hurt novice investors behind the spectacular recovery of small stocks like Gamestop.
“PRISON TIME,” Portnoy said in a tweet linked to Cohen, founder of Point72 Capital, and also Citadel, a hedge fund managed by billionaire Ken Griffin.
“Democrats and Republicans have not yet agreed on one issue. That is how today’s events are blatant, illegal and unfathomable. It also shows how untouchable @RobinhoodApp @ StevenACohen2C Citadel Point72 everyone thinks they are. Fines are not enough. Arrest or seizure. ”
Portnoy made the comment during a link to a news article reporting the anger of lawmakers over Robinhood’s trade restrictions that prohibit users from buying certain stocks, including GameStop.
Cohen replied, “Hey, Dave, what’s your problem with me. I’m just trying to make a living like you. Happy to resolve this offline. ”
“I don’t do it offline. That’s where the dark shit happens. ”
Dave Portnoy
“I don’t do it offline. That’s where the dark shit happens, ”said Portnoy.
He then accused Cohen of participating in controversial restrictions on trading apps like Robinhood, which are hurting novice investors behind the spectacular recovery of small stocks like Gamestop. Hedge funds lost billions on the rise by selling these shares, including Cohen’s Point72, which fell more than 10%.
“I think you had a strong influence on today’s criminal events to save hedge funds at the expense of ordinary people. Do you unequivocally deny this? ”Said Portnoy.
He cited as evidence Cohen’s recent efforts to rescue fellow hedge fund Melvin Capital Management from the losses suffered by betting against stocks like GameStop, known as “shorting”.
Cohen’s Point72 Asset Management, together with Griffin’s Citadel, invested $ 2.75 billion in Melvin, led by Cohen’s former protégé, Gabe Plotkin. Citadel also executes commercial orders on behalf of Robinood.
“You saved Melvin because he’s the kid with Citadel,” he snapped.
Cohen defended himself by saying, “What are you talking about? I unequivocally deny this charge. I had nothing to do with what happened today … chile out. “
Portnoy continued: “So, in your professional option, why did the negotiation stop in $ amc $ gme $ nok $ sndl $ nakd ? Would I be too curious? “
“Good question,” Cohen replied. “These questions should be directed to Robin Hood, etc. I am a merchant like you, like you. When you find out, give me a shout. ”
“I think that brokers should make a statement. It seems reasonable, ”he added.
The two men then seemed to be reconciled to Portnoy applauding Cohen for speaking up. “At least you’re talking and trying to answer. This is appreciated. ”
But elsewhere, the rivalry between Main Street and Wall Street continued to simmer with much of the outrage directed at Citadel, which is the biggest buyer of Robinhood’s order flow.
Citadel’s deal with Robinhood, which makes it pay for the app to perform user transactions, has long raised concerns on Wall Street that this will give the hedge fund part of the deal a special view of the market – something Citadel denied for a long time.
The company insisted on Thursday that it would keep its securities market and hedge fund businesses separate – and said it had nothing to do with Robinhood’s trade restrictions, which brought GameStop’s shares down 44 percent.
“Citadel Securities did not instruct or otherwise cause any broker to stop, suspend or limit trading or otherwise refuse to do business,” the company said in a statement.
This did not stop angry investors from attacking.
“We just witnessed Ken Griffin interfering in the markets to limit losses. It was a robbery. We need to investigate, ”wrote @chitriman on Twitter.
“This is actually the Citadel that Robinhood goes through, they are blocking [GamseStop], AMC and the others, ”wrote a Reddit user. “Robinhood is a victim of the bigger fish too.”