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Twitter Turns on Steve Cohen
The hedge fund manager had been using twitter to talk about the Mets — until his role in the GameStop fracas last week led to “personal threats.”
Count one more win for the social media mob that rocked Wall Street last week: Point72 Asset Management CEO Steve Cohen has shut down his Twitter account after his family received what he called “personal threats.”
Until getting into a beef with one of the more vocal defenders of GameStop investors last week, Cohen had been basking in love from Mets fans on a Twitter feed that, until that time, appeared to be dedicated to baseball.
The hedge fund icon sealed a deal to buy the Mets last November and since then has regularly tweeted about the beloved, but beleaguered, New York team. In contrast to his prior image as a secretive mogul, Cohen often engaged in playful bantering with Mets fans, who appeared to make up a big chunk of his 190,500 followers.
But last week Cohen’s hedge fund, Point72, became part of the GameStop saga that thrust hedge funds into the national spotlight for the first time in years, a fracas billed as class warfare between millennial social media-savvy retail investors and the establishment — older, billionaire hedge fund managers like Cohen.
Within days, Cohen was tangling with social media influencer Dave Portnoy, the founder of the website Barstool Sports. Portnoy appears to have made himself the unofficial spokesman for the GameStop investors — and now has 2.2 million Twitter followers.
After a terse back and forth, Cohen asked in a now deleted tweet, “Hey Dave, what’s your beef with me. I’m just trying to make a living just like you. Happy to take this offline,” to which Portnoy responded “I don’t do offline. That’s where shady shit happens.”
So how did it get this far?
On Monday Point72 agreed to help finance a bailout of hedge fund Melvin Capital, which was losing billions of dollars because of a short squeeze in GameStop (and other names) that was led by a band of retail investors who posted on the Reddit forum WallStreetBets.
Point72 agreed to put $750 million into Melvin, run by Gabriel Plotkin, a former portfolio manager at Cohen’s prior fund, SAC Capital. Citadel agreed to put up an additional $2 billion to shore up Melvin.
[II Deep Dive: Buried in Reddit, the Seeds of Melvin Capital’s Crisis]
The bailout was enough to get people riled up. As Cohen tweeted on Tuesday, “Rough crowd on twitter tonight. Hey stock jockeys, keep bringing it.”
They did. GameStop kept soaring, and by Thursday brokers including Robinhood, an app where many of the retail trades had been placed, restricted buying the stocks of such heavily shorted names. That created a furor among the WallStreetBets crowd, and got lawmakers like New York Rep. Alexandria Ocasio-Cortez and Sens. Elizabeth Warren and Ted Cruz talking about a Congressional investigation.
Portnoy amplified the controversy on Twitter.
The Twitter spat with Cohen began when the hedge fund manager responded to Portnoy after he had tweeted that “the thing that drives myself and so many people nuts is this belief that when this is over guys like Ken Griffin from Citadel, Gabriel Plotkin from Melvin, Steve Cohen and Vlad [Robinhood CEO Vladimir Tenev] will be at some secret country club laughing at all of us. And deep down we know we are right.”
“So Robin Hood raises $1 billion for liquidity reason and you are still ranting and raving. How about dealing with facts and not innuendo. Why let truth get in the way of your story?” Cohen shot back. (Thursday night Robinhood announced its VC investors had put $1 billion into the firm, which would give it enough capital to allow investors to trade again.)
“You bailed out Melvin cause he’s your boy along with Citadel,” Portnoy said to Cohen, referring to the rescue financing. Citadel also pays for order flow from Robinhood — leading the WallStreetBets gang to charge that Citadel had forced Robinhood to quit allowing the trades. Citadel quickly denied this, but the Texas attorney general issued a civil investigative demand to Citadel and a few other brokers late Friday. (GameStop is headquartered in Texas.)
“I think you had strong hand in today’s criminal events to save hedge funds at the cost of ordinary people. Do you unequivocally deny that?” Portnoy asked Cohen. (Portnoy also posted a four-minute video saying that Cohen, along with Griffin, should go to jail. It garnered 2.9 million views.)
“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,” Cohen responded.
“I’m not feeling the love tonight,” he later tweeted. “Trading is a tough game. Don’t you think?”
In a statement, Cohen’s firm said that “Point72 had no involvement in any retail broker’s decision to limit or restrict trading in any security, and never asked or pressured any retail brokerage firm to restrict trading in any security. Furthermore, as an institutional investor we do not do business with the retail brokerages and do not have relationships with them.”
On Saturday the Mets put out a statement from Cohen. "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," he said. “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. Bottom line is that this week's events in no way affect our resources and drive to put a championship team on the field.”
A few hours after that statement was made public, Portnoy temporarily “protected” his tweets, only allowing people he approved to see them. He later reopened the tweets to the general public, but all of his messages to Cohen had been deleted.