A real life rumble over GameStop between Wall Street and Main Street broke out Thursday between hedge fund billionaire Steve Cohen and day-trading poster boy Dave Portnoy.
The back-and-forth kicked off when Portnoy, founder of blogging site Barstool Sports, blasted Cohen, the billionaire owner of the Mets, for restrictions on trading apps like Robinhood that have hurt novice investors behind the spectacular rally in small stocks like Gamestop.
“PRISON TIME,” Portnoy said in a tweet that linked to Cohen, founder of Point72 Capital, as well as Citadel, a hedge fund run by billionaire Ken Griffin.
“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.”
Portnoy made the comment while linking to a news article reporting anger from legislators over Robinhood trading restrictions forbidding users from buying certain stocks, including GameStop.
Cohen snapped back: “Hey Dave , What’s your beef with me. I’m just trying to make a living just like you.Happy to take this offline.”
“I don’t do offline. That’s where shady s*** happens,” Portnoy said.
He then accused Cohen of having a hand in controversial restrictions on trading apps like Robinhood that are hurting novice investors behind the spectacular rally in small stocks like Gamestop. Hedge funds have lost billions in the rally by shorting these stocks, including Cohen’s Point72, which is down a more than 10 percent.
“I think you had strong hand in todays criminal events to save hedge funds at the cost of ordinary people. Do you unequivocally deny that?,” Portnoy said.
He cited as evidence Cohen’s recent efforts to bail out fellow hedge fund Melvin Capital Management from losses suffered by betting against stocks like GameStop, known as “shorting.”
Cohen’s Point72 Asset Management together with Griffin’s Citadel invested a combined $2.75 billion into Melvin, run by Cohen’s former protege Gabe Plotkin. Citadel also executes trade orders on behalf of Robinood.
“You bailed out Melvin cause he’s you’re boy along with Citadel,” he retorted.
Cohen defended himself saying, “What are you talking about? I unequivocally deny that accusation. I had zero to do with what happened today…chile out.”
Portnoy continued: “Then in your professional option why was trading halted on $amc $gme $nok $sndl $nakd ? I’d be very curious?”
“Good question,” Cohen shot back. “Those questions should be directed at Robin Hood etc. I’m a trader just like your like you are . When you find out give me a holler.”
“I do think the brokers should make a statement . Seems reasonable,” he added.
The two men then seemed to make amends with Portnoy applauding Cohen for speaking up. “At least you are speaking and trying to answer. That is appreciated.”
But elsewhere the feud between Main Street and Wall Street continued to simmer with much of the outrage directed at Citadel, which is the largest purchaser of Robinhood’s order flow.
Citadel’s deal with Robinhood, which has it paying the app to execute user trades, has long led to concerns on Wall Street that this gives the hedge fund part of the business special insight into the market — something Citadel has long denied.
The company on Thursday insisted that it keeps its market-making securities business and hedge fund trading business separate — and said it had nothing to do with Robinhood’s trading restrictions, which sent shares of GameStop down 44 percent.
“Citadel Securities has not instructed 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 didn’t stop angry investors from lashing out.
“We have just witnessed Ken Griffin interfere with the markets to limit losses This was a heist. We need to investigate,” @chitriman wrote on Twitter.
“This is actually Citadel who Robinhood runs through, they are blocking [GamseStop], AMC, and the others,” a Reddit user wrote. “Robinhood is a victim of the bigger fish too.”
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