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Investor David Einhorn said on Thursday that prominent speculator Chamath Palihapitiya and entrepreneur Elon Musk threw “jet fuel” on the GameStop Corp trading frenzy in January when the video retailer’s shares rose by 2,000% and later prompted a hearing in U.S. Congress.
Einhorn, who runs hedge fund Greenlight Capital, also said U.S. lawmakers seeking answers to how day traders were ready to wrest control of GameStop’s share price from established hedge funds should probe regulators rather than investors.
Amateur investors organized on social media sites like Reddit staged a stubborn buying spree three months ago, winning out over Wall Street hedge funds that had shorted GameStop’s shares or bet that the worth would fall.
The wild price swings caused heavy losses for hedge fund Melvin Capital, among others. U.S. lawmakers reacted by organizing a U.S. House of Representatives hearing in February where they quizzed hedge funds, each day trader and therefore the chief of the web trading app Robinhood.
Einhorn on Thursday blamed Palihapitiya and Tesla Inc’s CEO, Musk, for throwing what he called “jet fuel on the GME squeeze.” His comments appeared during a quarterly letter to Greenlight Capital investors which was seen by Reuters.
Representatives for Palihapitiya and Musk didn’t immediately answer requests for comment.
Einhorn said it’s appropriate for investors to debate stocks.
“Investors discussing why they think GameStop (or the other stock) should go up or down need to be encouraged,” he wrote. “There is not any reason to tug anyone before Congress for creating a stock pick.”
Einhorn said Palihapitiya, who appeared on TV in late January and dismissed criticism of day traders, may need been trying to harm Robinhood because it competes with fintech startup SoFi, which was backed by Palihapitiya.