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Summoned to testify before a House committee Thursday about about his hedge fund’s short trading of GameStop shares, Melvin Capital CEO Gabriel Plotkin will say that Reddit traders behind the meme stock frenzy targeted him with anti-semitic attacks.
Gabe Plotkin, chief investment officer and portfolio manager of Melvin Capital Management LP, speaks … [+]
Key Facts
In prepared testimony released Wednesday, Plotkin said Reddit posters encouraged others to drive up the price of GameStop stock in posts “laced with antisemitic slurs” directed at him and others, citing one example where someone wrote, “It’s very clear we need a second holocaust, the jews can’t keep getting away with this.”
Melvin Capital suffered massive losses when GameStop’s share price climbed to record heights, and has been a particular target of the Reddit forum r/WallStreetBets, who style themselves as crusaders against wealthy Wall Street firms.
Plotkin denied Melvin Capital was involved in Robinhood’s decision to temporarily halt trading of meme stocks, and added that short selling in general is not part of an effort to “artificially depress or manipulate downward the price of a stock.”
Plotkin also denied Melvin was “bailed out” by hedge fund giant Citadel, saying the firm wasn’t seeking a cash infusion after losing more than half its value on GameStop, and that Citadel “proactively” reached out because it wanted to see returns when Melvin Capital’s value went up again.
The moderators of r/WallStreetBets, who are in charge of making sure the community doesn’t run afoul of Reddit’s hate speech guidelines, did not respond to a direct message from Forbes on Twitter.
Key Background
This isn’t the first time r/WallStreetBets has been accused of hate speech and offensive language. At the height of the GameStop stock frenzy, the community’s Discord server was briefly banned for “hate speech, glorifying violence, and spreading misinformation.” In response, a moderator said they were trying in good faith to weed out hate speech, but the task became difficult with a massive influx of new members. “You know as well as I do that if you gather 250k people in one spot someone is going to say something that makes you look bad,” one wrote in a Reddit post, responding to the Discord ban.
Tangent
Plotkin’s experiences reflect similar complaints made by Citron Research founder Andrew Left, who told Institutional Investor that Redditors were “calling him nonstop,” hacked his Twitter and made a fake Tinder profile for him.
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