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A real-life GameStop rumble between Wall Street and Main Street erupted Thursday between hedge fund billionaire Steve Cohen and day-trading poster Dave Portnoy.
The back-and-forth started when Portnoy, founder of blogging site Barstool Sports, criticized Cohen, the billionaire owner of the Mets, for restrictions on trading apps like Robinhood that hurt novice investors behind the spectacular rally in small actions like Gamestop.
“PRISON TIME,” Portnoy said in a tweet linked to Cohen, founder of Point72 Capital, as well as Citadel, a hedge fund managed by billionaire Ken Griffin.
“Democrats and Republicans have not agreed on an issue so far. This is how blatant, illegal and unfathomable today’s events are. It also shows how @RobinhoodApp @ StevenACohen2C Citadel Point72 all thinks so. Fines are not enough. Prison or bust.
Portnoy made the comment referring to a news article reporting lawmakers’ anger over Robinhood’s trade restrictions prohibiting users from purchasing certain stocks, including GameStop.
Cohen retorted, “Hey Dave, what’s your problem with me. I’m just trying to make a living like you. Glad to take this offline. ”
“I don’t do offline. This is where the shady shit happens.
Dave portnoy
“I don’t do offline. This is where the shady crap happens, ”Portnoy said.
He then accused Cohen of participating in controversial restrictions on trading apps like Robinhood that hurt novice investors behind the spectacular rally in small stocks like Gamestop. Hedge funds lost billions in the rally by shorting these stocks, including Cohen’s Point72, which is down more than 10%.
“I think you played an important role in today’s criminal events to save hedge funds at the expense of ordinary people. Do you deny it unequivocally? Said Portnoy.
He cited as evidence Cohen’s recent efforts to bail out hedge fund Melvin Capital Management from losses incurred by betting stocks like GameStop, known as “shorting.”
Cohen’s Point72 Asset Management and Griffin’s Citadel have invested $ 2.75 billion in Melvin, led by former Cohen protégé Gabe Plotkin. Citadel also executes trade orders on behalf of Robinood.
“You bailed out Melvin because you’re a boy with Citadel,” he retorted.
Cohen defended himself by saying, “What are you talking about? I unequivocally deny this accusation. I had nothing to do with what happened today… in Chile.
Portnoy continued: “Then, in your professional option, why was the negotiation interrupted on $ amc $ gme $ nok $ sndl $ nakd ? I would be very curious?
“Good question,” Cohen replied. “These questions should be directed to Robin Hood and so on. I am a trader, just like you. When you find out, give me a shout.
“I think brokers should make a statement. It seems reasonable, ”he added.
The two then appeared to make amends with Portnoy applauding Cohen for speaking up. “At least you talk and try to answer. It’s appreciated. ”
But elsewhere, the feud between Main Street and Wall Street has continued to simmer with much of the outrage directed at Citadel, which is the biggest buyer in Robinhood’s order flow.
Citadel’s deal with Robinhood, which allows it to pay for the app to execute user trades, has long raised concerns on Wall Street that it will give the hedge fund part of the company a special insight into the market – this that Citadel has long denied.
The company insisted on Thursday that it was separating its securities trading and hedge fund trading business – and said it had nothing to do with Robinhood’s trading restrictions, which did drop GameStop stock by 44%.
“Citadel Securities has not ordered or otherwise caused any brokerage firm to stop, suspend or limit trading or otherwise refuse to do business,” the company said in a statement.
That hasn’t stopped angry investors from going after them.
“We just saw Ken Griffin interfere with the markets to limit losses. It was a heist. We need to investigate, ”@chitriman wrote on Twitter.
“It is in fact the Citadel that Robinhood crosses, they block [GamseStop], AMC and the rest, ”wrote one Reddit user. “Robinhood is also a victim of the bigger fish.”
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