BARSTOOL Sports Director D.Ave Portnoy has blown Robinhood’s attempt to restrict GameStop trading, calling it “absolutely criminal” after the broker fueled its stock prices.
In an interview on FOX Business’ Varney and Co, Portnoy said Robinhood, a trading app, “was basically stealing money from its own customers.”
Dave Portnoy, CEO of Barstool, says Robinhood “stole money”.Photo credit: Fox News
The Robinhood Trading App has imposed new restrictions.Photo credit: Reuters
“They purposely cratered a number of stocks … by letting people sell, not buy,” he said.
“Deliberately scraping inventory at the expense of all of your customers … well, that’s criminal in my eyes. That’s absolutely criminal.”
All hell broke loose this week when amateur online retailers, many affiliated with the Reddit forum WallStreetBets, started pumping money into companies like GameStop, American Airlines, and Bed, Bath & Beyond to create big, entrenched ones Hedge funds undercut short the company.
The push resurrected the market, with GameStop stocks fluctuating hundreds of dollars in value in a matter of hours and hedge funds bleeding billions.
Robinhood and other brokerage platforms, including TD Ameritrade and Interactive Brokers on Tuesday and Wednesday, restricted trading in stocks of volatile stocks due to the unexpected spike in volatility.
Portnoy has unleashed on Twitter about Robinhood’s decisionPhoto credit: Getty Images – Getty
That decision has hurt inexperienced investors behind the spectacular Reddit rally in small stocks like Gamestop.
Portnoy said the coordination from people on social media sites like Reddit “definitely manipulated the stock price” but also found that professional traders “have been doing the same thing for years”.
“You are telling me that analysts don’t manipulate stock prices and drive them up and down to create buy and sell opportunities?” Portnoy asked host Stuart Varney.
“I’m not saying what the new people are doing is great, but let’s not pretend the old people didn’t make billions and have yachts and mansions to do the exact same thing.”
Portnoy criticized Robinhood for changing the rules “overnight without telling anyone”.
A Robinhood spokesman said the measures were designed to “protect investors and markets”.
These requirements are there to protect investors and the markets, and we take our responsibility to comply with these requirements seriously, including through the actions we have taken today.
– VLAD (@vladtenev) January 28, 2021
However, the Robinhood User Agreement, which anyone must sign before trading the app, states that the company can “prohibit or restrict” a user’s tradability at any time without notice, reports NY Post.
On Thursday, Portnoy also aimed to get Steve Cohen, the owner of hedge fund mets, over the tumult on Wall Street, accusing him of playing a role in the freezing.
Cohen’s Point72 Asset Management stepped in to keep the hedge fund of his former protégé Gabe Plotkin afloat, which has reportedly lost around 30 percent of its portfolio in the chaos.
“PRISON TIME,” Portnoy said in a tweet linked to Cohen, founder of Point72 Capital, and Citadel, a hedge fund owned by billionaire Ken Griffin.
“I think you had a strong hand in today’s criminal events, saving hedge funds at the expense of the common people. Are you clearly denying that? Asked Portnoy.
As evidence, he cited Cohen’s recent efforts to bail out the other hedge fund, Melvin Capital Management, from losses incurred by betting on stocks like GameStop, known as “shorting”.
Cohen’s Point72 Asset Management, along with Griffin’s Citadel, invested a total of $ 2.75 billion in Melvin, which was run by Cohen’s former protégé Gabe Plotkin. Citadel also executes trade orders on behalf of Robinood.
On Thursday, GameStop rumbled between Wall Street and Main StreetPhoto credit: Reuters
A Robinhood spokesman said the move was to “protect investors”.Credit: AFP or Licensor
Cohen defended himself and said, “What are you talking about? I clearly deny this allegation. I had nothing to do with what happened today … chile out. “
Portnoy continued, “Then why was your professional option trading in $ amc $ gme $ nok $ sndl $ nakd stopped? 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, how you are. If you find out, give me a call. “
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“I think the brokers should make a statement. Seems sensible, ”he added.
Portnoy praised Cohen for his response.
“At least you speak and try to answer. That is appreciated, “he wrote.