- Billionaire Steve Cohen has quit Twitter because of a possible game-changing threat to GameStop's existence.
- The reason that this news made the rounds was the fact that Steve Cohen is a successful online stock market investor.
- A few investors on social media rallied to take on GameStop and other shares, sending the stock price skyrocketing.
Billionaire Steve Cohen has quit Twitter because of a possible game-changing threat to GameStop’s existence. “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.”
In a nutshell, GameStop’s board of directors had been discussing a potential new company.
According to a GameStop investor, the plan was to create a pay-for-performance site where video game enthusiasts could pay a monthly membership fee to gain access to special benefits such as advanced stock tips and “hotlists” of game reviews.
If successful, it was expected that GameStop could move into direct competition with other video game companies like Electronic Arts and Nintendo.
However, in a series of messages posted on Twitter, Cohen threatened to boycott GameStop if they did not allow him to promote his new company. “I’m going to take a break for now,” Cohen said on Twitter late on Friday, citing “personal threats.” In addition, according to sources familiar with the situation, Cohen requested that other GameStop investors stop buying his stock.
This ignited a mini-blogger war with some GameStop investors claiming that Cohen used Twitter to “personalize” his stock portfolio by putting too much money into a bunch of well-known blogs.
He also allegedly told one of these GameStop investors “You are not going to take a break” when asked why he had stopped tweeting about GameStop stock. He then issued a number of statements saying that he was going to take a break from Twitter. And then he deleted his Twitter account.
The reason that this news made the rounds was the fact that Steve Cohen is a successful online stock market investor. He has used Twitter to post about deals and various stocks since 2021.
He has used it to keep himself abreast of changes in his stocks, and how other investors are reacting to them. He’s even used Twitter to post the news of deals that he has gotten into. So it was obvious that this was not a personal break.
A few investors on social media rallied to take on GameStop and other shares, sending the stock price skyrocketing. It was uncertain if Cohen was a short seller.
The point72 capital injection was used to offset a significant short position in GameStop. This allowed the fund to withstand a failure and expand its capital base.
Andrew Left, who runs Citron Research, a firm that publishes reports on stocks said: “We understand the changing dynamics in the market,” Left said in a video released on Twitter Wednesday. “So with that, we’ll become more judicious when it comes to shorting stocks.”
“As soon as some shorts are covering there are a line of new short-sellers looking to locate and short GME at these high stock price levels,” says Ihor Dusaniwsky, S3’s managing director of predictive analytics, citing his conversations with brokers. “Much like in trench warfare, after the first wave gets decimated, the second wave takes up the banner and marches onward.”