Barstool sports founder Dave Portnoy lost $700K in GameStop frenzy

He also criticized the trading app Robinhood

Josh Marcus
San Francisco
Tuesday 02 February 2021 23:42
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Barstool Sports founder Dave Portnoy blamed stock-trading app Robinhood for the roughly $700,000 he lost trading in the Gamestop stock frenzy, as Redditors’ dream of taking meme stocks “to the moon” unravels and shares in the games retailer and others went tumbling on Tuesday.

“I have officially sold all my meme stocks,” Mr Portnoy said on Twitter on Tuesday.

“I lost 700k ish. Vlad and company stole it from me and should be in jail,” referring to Robinhood CEO Vlad Tenev, whose company temporarily restricted trading on 50 stocks last week amid an internal cash crush that left it unable to meet regulatory requirements.

On Sunday, Mr Tenev told Tesla’s Elon Musk on the conversation app Clubhouse that he knew the shutdown was “a bad outcome for customers,” but argued “we had no choice in this case.”

The company has raised more than $3 billion in emergency funding in recent days to shore up its liquidity.

The Barstool CEO has railed against Robinhood throughout the Gamestop bubble, calling its actions “blatant, illegal, unfathomable,” in a post criticising the company, as well asblasting Steven A Cohen, the billionaire hedge fund magnate and New York Mets owner, who helped prop up Melvin Capitol, one of the Wall Street firms taking big losses in the GameStop saga.

Intense criticism and threats made Mr Cohen leave Twitter, saying he was getting “personal threats” to his family.

“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 in a statement. “So I’m going to take a break for now.”

Mr Portnoy wasn’t alone in facing big losses during the bubble, where online investors bet against the position of Wall Street funds and tried to drive the share price of companies like GameStop and movie theatre chain AMC way up.

Melvin Capitol, run by Gabe Plotkin, Mr Cohen’s former protege, needed more than $2 billion from investors to bail it out after taking big losses amid the stock market rollercoaster.  

On Tuesday, Robinhood took out a full page ad in the New York Times saying the whole experience had “humbled” the company. It promised it was “committed to seizing this moment as an opportunity to continue to improve while we try to expand access to the entire financial industry for everyone.”

As of Tuesday evening, GameStop shares were down more than 60 per cent, and AMC more than 40 per cent.

The Robinhood CEO will testify before Congress on 18 February in a hearing investigating what happened. 

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