Are you still not quite sure exactly what the whole kerfluffle this week between Steve Cohen, GameStop stock, and Robinhood is?
It’s become so big that even CNBC covered our coverage of it this morning (thanks for the dap, y’all!), and Barstool Sports’ Dave Portnoy – who very publicly got into it with Mets owner Steve Cohen on Twitter about his possible role in this – joined Boomer & Gio Friday morning to give his take.
“So Melvin Capital is one we know shorted GameStop and was getting ruined, and Steve Cohen and Citadel bailed him out; they’re buddies with Steve Cohen, so he bailed them out,” Portnoy said. “That did them no good because the stocks were still going ballistic, so then all of a sudden, Robinhood disallowed buying the stock, saying you could only sell it, and cratered it. It crashed and allows whoever shorted it to get out unscathed, basically, and that’s why they’re in the crosshairs – I’m convinced illegal activities were going on.”
Given the facts and some info on the companies, Portnoy isn’t backing down.
“Citadel clears 50 percent of Robinhood’s trading, and Robinhood has an IPO scheduled soon – who do you need for IPOs? Hedge funds and institutional money,” Portnoy said. “Something’s going on, and I believe that were there’s smoke, there’s fire, and this is a five-alarm fire – and I’m sure with Steve Cohen, he denied his involvement, but when he got busted last time, he didn’t raise his hand immediately to say ‘yeah, I was involved.’”
Portnoy wouldn’t say Citadel “forced” Robinhood to make the move to curtail trading, but it wasn’t just their own accord or a giant coincidence in his mind, even if they did so as a form of seppuku almost.
“Whatever the word may be, they weren’t idly sitting by; there’s no part of me that thinks Robinhood did what they did without outside thought,” he said. “To me, Robinhood will cease to exist the way it existed two days ago, as an everyday trader app. No one trusts them, and they had to know that. I can’t believe they thought they could take all the money away from the retail traders, which is the basis of their company – they had to know this was the end of their business as they know it, and still chose to do it.”
Portnoy is of the belief that the choice was bankrupt a bunch of billionaires, or do something illegal and deal with the repercussions, which would be “easier white-collar crimes.”
“Steve Cohen pays million-dollar fines like we pay $10 speeding tickets,” Portnoy said. “I use Robinhood as an example because they kind of started this retail platform, but they said they did it to protect their clients – their everyday traders, the Jims and Joes. If that’s what you’re doing, then freeze it, figure it out, and allow your people to sell it. But how is cratering the stock protecting the people that invest with them?”
Portnoy reiterated that his opinion is just that, and he has no proof, but noted that Cohen is “one of the most powerful men” in the game, and that Cohen being able to get involved “isn’t without reason.”
“I don’t think that he necessarily was involved with Melvin Capital, but he could have money in there,” Portnoy said, “and these buddies did a lot to pressure Robinhood to do this.”
El Presidente also spoke about how pressure from Washington could have been involved, as well as
“I think we believe, and 99 percent of Americans believe, that Wall Street is a dirty, crooked game,” Portnoy said, “and this was so overt what they did…this is the first time the retail bros with no connection are winning and winning big, and all of a sudden everything changes?”
Similar to a football analogy Portnoy gave Boomer.
“If you’re playing football and it’s fourth down and you don’t get it, and somebody comes down from above and gives you two more downs.”
Check out Portnoy’s entire segment with Boomer & Gio below!