Investor Einhorn says Palihapitiya, Musk poured ‘jet gas’ on GameStop By Reuters

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© Reuters. FILE PHOTO: Greenlight Capital’s Einhorn speaks at a convention

By Svea Herbst-Bayliss

BOSTON (Reuters) – Investor David Einhorn mentioned on Thursday that outstanding enterprise capitalist Chamath Palihapitiya and entrepreneur Elon Musk threw “jet gas” on the GameStop Corp (NYSE:) buying and selling frenzy in January when the video retailer’s shares rose by 2,000% and later prompted a listening to in U.S. Congress.

Einhorn, who runs hedge fund Greenlight Capital, additionally mentioned U.S. lawmakers looking for solutions to how day merchants have been capable of wrest management of GameStop’s share worth from established hedge funds ought to probe regulators as an alternative of traders.

Beginner traders organized on social media websites resembling Reddit staged a cussed shopping for spree three months in the past, successful out over Wall Road hedge funds that had shorted GameStop’s shares or guess that the worth would fall.

The wild worth swings triggered heavy losses for hedge fund Melvin Capital, amongst others. U.S. lawmakers reacted by organizing a U.S. Home of Representatives listening to in February the place they quizzed hedge funds, a day dealer and the chief of the web buying and selling app Robinhood.

Einhorn on Thursday blamed Palihapitiya and Tesla (NASDAQ:) Inc’s CEO, Musk, for throwing what he referred to as “jet gas on the GME squeeze.” His feedback appeared in a quarterly letter to Greenlight Capital traders which was seen by Reuters.

Representatives for Palihapitiya and Musk didn’t instantly reply to requests for remark.

Einhorn mentioned it’s acceptable for traders to debate shares.

“Buyers discussing why they suppose GameStop (or some other inventory) ought to go up or down should be inspired,” he wrote. “There is no such thing as a purpose to pull anybody earlier than Congress for making a inventory choose.”

Einhorn mentioned Palihapitiya, who appeared on TV in late January and dismissed criticism of day merchants, may need been attempting to hurt Robinhood as a result of it competes with fintech startup SoFi, which was backed by Palihapitiya.

And Musk, whose Tesla shares Einhorn has lengthy guess towards, waded in to the drama by tweeting “Gamestonk!!” and including a hyperlink to the Reddit discussion board the place day merchants have been discussing GameStop.

“If regulators needed Elon Musk to cease manipulating shares, they need to have completed so with greater than a light-weight slap on the wrist after they accused him of manipulating Tesla’s shares in 2018,” Einhorn wrote.

Einhorn mentioned if lawmakers needed to grasp “why GameStop did what it did … it will be higher to name to account the absentee regulators and their philosophical backers.”

He instructed traders that his Greenlight Capital Funds have been primarily flat within the first quarter, inching down 0.1%, whereas the index gained 6.2%

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