A Wall Street titan linked to the remarkable Robinhood feeding frenzy abruptly quit Twitter Friday night as it emerged that some of the board members of the companies involved were making money from the surreal week.
Steve Cohen, the financier and owner of the New York Mets, estimated to be worth $ 14.6 billion, bowed to Twitter on Friday.
Cohen’s company Point72 Asset Management, a $ 19 billion hedge fund company he founded in 2018, got sucked into the drama this week through their relationship with Melvin Capital, a hedge fund that had a huge bet against GameStop.
Point72 already had about $ 1 billion under management and Melvin added $ 750 million to help stabilize Melvin this week as GameStop’s stock price surged, causing huge losses for Melvin.
Steve Cohen, a financier worth about $ 14.6 billion, has been swept up in the GameStop saga
Cohen had debated the week’s trades with Dave Portnoy, the founder of Barstool Sports
Shares of GameStop were up 135 percent on Wednesday alone, and are up more than 1,700 percent this year after a Reddit forum, WallStreetBets, began forcing the price largely through the trading platform Robinhood.
The rise has taken its toll on some major investors, such as Melvin, who gambled against the stock.
Cohen, who bought the New York Mets in November and outflanked Jennifer Lopez and Alex Rodriguez to sign the baseball team, appeared to be enjoying a fierce debate over the roller coaster markets at the start of the week.
“Rough crowd on Twitter tonight,” Cohen tweeted Wednesday night. “Hey stock jockeys keep bringing it.”
On Thursday, Cohen got into a Twitter debate with Dave Portnoy, a famous day trader, after the Barstool Sports blogger attacked Cohen over restrictions on trading apps like Robinhood that hurt the budding investors driving GameStop’s surging stock value.
“Hey Dave, what’s your problem with me,” Cohen tweeted back. ‘I’m just trying to make a living, just like you. Happy to take this offline. ‘
Finally, Portnoy tweeted, “At least you speak and try to answer. That is appreciated. ‘
Friday night, Cohen’s account was deleted.
Many mourned his departure from Twitter, as they enjoyed his unusual interaction with Mets fans and unfiltered opinions.
“Give this to Steve Cohen, he didn’t announce very loud that he needed a ‘self care social media break’ before logging out,” tweeted Laura Albanese, a sports reporter at Newsday.
Others took a more comedic side, tweeting, “It’s nice to see Steve Cohen living up to the Mets tradition of giving up after a few months.”
Traders, pictured on the New York Stock Exchange on Jan. 9, have had a wild week
Cohen’s bow from social media came when it was revealed that others involved in the extraordinary week have benefited greatly from the situation.
As of January 1, executives at BlackBerry and GameStop have been selling stock, cashing in more than $ 22 million in total.
The executives have also received a huge boost from the amateur social media traders who have been bidding on the companies’ stock.
Some have stated that their mission is to channel profits from Wall Street to ordinary people, but inadvertently helped business leaders.
Steve Rai, Blackberry’s Chief Financial Officer (left), and Kurt Wolf, a GameStop board member have both benefited from their companies’ rising stock
Broker Robinhood has been the focus of interest in GameStop’s surging stocks
Protesters gathered outside the New York Stock Exchange on Thursday evening
Three BlackBerry executives cashed in nearly $ 1.7 million worth of stock in the company last week, CBS News reported.
One of the three, Steve Rai, BlackBerry’s Chief Financial Officer, has sold all of his shares in the company, although he has unexpired options that could turn into stocks in the future.
BlackBerry stock traded at about $ 5.50 until the Reddit board seized it, meaning the trio’s shares would be worth about $ 700,000.
But the frenzy added $ 1 million to the combined value of their shares.
It was unclear how much of the $ 1.7 million went to Rai.
At GameStop, Kurt Wolf, a money manager and former executive advisor who joined the GameStop board last year, sold more than two-thirds of his shares in January.
The sale brought in Wolf’s investment fund just over $ 17 million.
There is no allegation of improper insider trading in connection with any of the transactions.
Developments among financiers came as Robinhood continued to restrict trade for small-scale investors.
On Thursday, Robinhood blocked the sale of certain shares and sold users’ shares without permission, causing unrest on the Internet, protests on Wall Street and starting investigations by Congress and the New York Attorney General.
Robinhood CEO Vlad Tenev, 33, defended his company’s actions on Thursday evening.
Vlad Tenev defended his company’s actions in an interview on Thursday evening
‘We had to make a very difficult decision. It’s been a challenging day, ”Tenev told MSNBC.
Robinhood cited “recent volatility” for the decision to block users from buying shares in GameStop and 12 other companies that Reddit users selected for “short squeezes.”
The company had to bolster its money cushion to do business. With the additional cash infusion, Robinhood said it would lift restrictions on certain stocks that were restricted on Thursday.
On Friday, however, the users of Robinhood were still limited.
Customers were only able to buy one share of GameStop at the end of the day, after being able to buy five at the start of trading.
The stock trading app also expanded its restricted stock list from 13 earlier in the day to 50.
A ‘short squeeze’ occurs when investors target a stock – in this case GameStop, which has a large ‘short interest’.
A short is when an investor essentially places a bet that a stock will fall. When it falls, the investor makes money. But there is a pressure when another investor bets that the stock will go up. If enough investors do that, the price of the stock pushes higher and pushes out the short – forcing the investor who bet the stock would drop to lose money.
The company has been hit by a class-action lawsuit accusing it on the Wall Street side of blocking investors’ ability to buy stock.