Hedge-fund billionaire Steven Cohen deleted his Twitter account Friday following an uproar of thousands of Robinhood users.
"I've really enjoyed the back and forth with Mets fans on Twitter, which was unfortunately overtaken this week by misinformation unrelated to the Mets that led to our family getting personal threats. So I'm going to take a break for now.
"We have other ways to listen to your suggestions and remain committed to doing that. I love our team, this community, and our fans, who are the best in baseball. The bottom line is that this week's events in no way affect our resources and drive to put a championship team," a statement read from Cohen.
Cohen's Point72 Asset Management and hedge fund Citadel managed by Ken Griffin, infused Melvin Capital Management with $2.75 billion after its GameStop short spectacularly blew up in the "mother of short squeezes."
Retail traders, including Barstool's Dave Portnoy, accused Cohen of pressuring Robinhood in restricting GameStop (GME) shares from trading to protect Melvin and other hedge fund buddies who were short.
In a Twitter spat late last week, Portnoy went after Cohen. Here are some of the back and forth conversations the two had on Thursday afternoon:
Portnoy tweeted, "PRISON TIME. Dems and Republicans haven't agreed on 1 issue till this. That's how blatant, illegal, unfathomable today's events are. It also shows how untouchable @RobinhoodApp @StevenACohen2C Citadel Point72 all think they are. Fines aren't enough. Prison or bust."
... and believe it or not, Steven Cohen, founder of hedge fund Point72 Asset Management, who with Citadel bailed out Melvin Capital for their Gamestop short, responded to Portnoy and said, "Hey Dave, What's your beef with me. I'm just trying to make a living just like you. Happy to take this offline."
Barstool's founder responded by saying, "I don't do offline. That's where shady shit happens. You bailed out Melvin cause he's you're boy along with Citadel. I think you had a strong hand in today's criminal events to save hedge funds at the cost of ordinary people. Do you unequivocally deny that?"
"What are you talking about? I unequivocally deny that accusation. I had zero to do with what happened today Btw, If I want to make an additional investment with somebody, that is my right if it's in the best interest of my investors, Chill out."
Considering Portnoy and r/WallStreetBets have millions of followers, the Twitter spat went viral in a matter of minutes. Thousands of people bashed Cohen and hedge funds for their alleged acts to pressure Robinhood to restrict trading on GameStop.
After a couple of days of angry traders bashing Cohen, it appears sometime late on Friday, the hedge fund billionaire decided to delete his Twitter account. Perhaps he couldn't take the heat.
One of Portnoy's writers on Barstools had this to say:
"But as a person, Steve Cohen is a garbage raccoon. His proudest achievement is paying a $1.8 billion fine to the SEC. When criticized for bailing out Robinhood (and he is more than likely the reason they stopped allowing people to trade GME, AMC, NOK, etc.) he joked "trading is a tough game" when he had the rules literally changed to stop him from losing money at the expense of the common man, and he followed it up with how he was just "trying to make a living". So basically, he stole money from every common man trader on Robinhood and laughed about it while we were left holding the bag. The empty bag. That's who this guy is."
While there's no concrete evidence and just hearsay of Cohen and hedge funds pressuring Robinhood to restrict trading - one thing we do know is that there's not just a list of hedge funds that have been severely battered by the squeeze (we noted shorts lost tens of billions of dollars in the GME) but also Robinhood itself could be in trouble.
On Thursday, Robinhood drew on its bank lines and obtained a $1 billion rescue capital investment and has since restricted users from trading stocks and options in dozens of securities. As we noted Friday evening, we believe there are issues "between DTC, clearinghouses and other regulatory entities, Robinhood was found to be in another capital deficiency position - even with the billions raised overnight - and it is being forced to deliver."
This likely means that Robinhood is, even though the weekend, scrambling to obtain even more capital, although we somehow doubt it will be easy.
It also means that we may have to have another "Lehman Weekend" situation on our hands, only this time it will be a "Robinhood Weekend", and an urgent acquisition from a strategic buyer may be required to prevent the worst-case outcome. We only hope that the billions in funds held in custody for clients have segregated should the company collapse.
A new class of decentralized activist investors, otherwise called r/WallStreetBets, spectacularly outsmarted a bunch of PhD hedge fund managers and capitalized on a market imbalance, and along the way, blew up a few hedge funds, sent Robinhood into a tailspin, and created market stress.
With that in mind, trending this morning on Twitter is "Steve Cohen" - here's what Twitter users had to say about Cohen deleting his account:
Steve Cohen MUST be convicted of insider trading. He barely escaped prison last time. He’s the most dishonest corrupt person. He screwed many people and then laughed about it. MLB must force him to sell the Mets. Jerry Seinfeld is waiting to buy the team. #mets #MLB— drumstx (@drumstx1) January 30, 2021
Steve Cohen got ran off Twitter by Prez come on bro. This guy ain’t it for NY.— Craig Wierman (@Cwoahh) January 30, 2021
lol Steve Cohen went into hiding— JS (@JSalvato31) January 30, 2021