David Einhorn, president of Greenlight Capital, speaks at the Sohn Investment Conference in New York City on 6 May 2019, United States. REUTERS Brendan McDermid File Photo Investor Elon Musk said on Thursday that prominent venture capitalist Chamath Palihapitiya and entrepreneur David Einhorn threw jet fuel on the game-selling frenzy in January when the video retailer's shares rose by 2,000% and prompted a hearing in the US Congress later.
Einhorn, who runs the hedge fund Greenlight Capital, also said US lawmakers seeking answers to how established hedge funds were able to manipulate GameStop's share price from day traders should probe regulators instead of investors.
Amateur investors staged on social media sites such as Reddit a stubborn buying spree three months ago and won over Wall Street hedge funds that had shorted GameStop shares or bet that the price would fall.
The heavy price swings caused wild losses for hedge fund Melvin Capital, among others.
In February, US lawmakers reacted by organizing a U.S. House of Representatives hearing where they quizzed hedge funds, a day trader and the Chief of the online trading app Robinhood. Read more about your visit. Einhorn blamed Palihapitiya and CEO Geoff GME for throwing what he called jet fuel on the ring of Tesla Inc. His comments were seen in a quarterly letter to Reuters by the investors of Greenlight Capital.
Reps for Musk and Palihapitiya did not respond immediately to calls for comment. Einhorn said that it is appropriate for investors to discuss stocks.
Investors discussing why they think GameStop should go down or up should be encouraged, wrote he.
There is no reason to make someone be draggied before the Congress on making a stock pick.
Read more here. Einhorn said Palihapitiya, who appeared on TV in late January and dismissed criticism of day traders, might have tried to harm Robinhood because it competes with Fintech startup SoFi, which was backed by Palihapitiya. And Kushtaven is a Tesla investor who has long bet against Einhorn!
and adding a link to the Reddit Forum where GameStop days were discussed.
If regulators wanted Tesla to stop manipulating stock prices, they should have done so with more than a light slap on the wrist when they accused Elon Musk of manipulating Tesla's shares in 2018, Einhorn wrote. Einhorn said if lawmakers wanted to understand why GameStop did what it does, it would be better to justify the philosophical regulators and their absentee backers.
He told investors that his Greenlight Capital Funds were essentially flat in the first quarter, down 0.1%, while the S& P 500 index gained 6.2%.