Did Elon Musk’s ‘jet fuel’ set GameStop (and Bitcoin) ablaze?

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Relying on the place you stand on the GameStop saga, which noticed organized retail merchants extract $6 billion from Wall Road in a single day, you might suppose somebody ought to both take the matches away from Elon Musk, or give him extra.

The CEO and “Technoking” of Tesla was accused of pouring “jet gas” on the GameStop short-squeeze at a crucial second by hedge fund supervisor David Einhorn, founding father of Greenlight Capital, in a letter to traders revealed on Thursday.

Einhorn mentioned Musk and enterprise capitalist Chamath Palihapitiya have been the true instigators behind the short-squeeze, claiming each had provided “the true jet gas” for the pump with their tweets and TV appearances.

“We word that the true jet gas on the GME squeeze got here from Chamath Palihapitiya and Elon Musk, whose appearances on TV and Twitter, respectively, at a crucial second additional destabilized the state of affairs,” wrote Einhorn, according to Markets Insider.

Amid the orchestrated short-squeeze on GameStop by redditors on r/Wallstreetbets, Musk tweeted what some interpreted as his assist for the endeavor. On Jan. 26, shortly after the GME inventory was pumped 91% in a single day, Musk tweeted the phrase “Gamestonk!!” accompanied by a hyperlink to the r/Wallstreetbets sub-reddit.

Over the course of the subsequent 24 hours, GME’s inventory soared 134%, climbing from a unit value of $147 to $347. The next 24 hours introduced much more fireworks, and by Jan. 28, the worth of GameStop shares had hit an all-time excessive of $483 — an 18,693% enhance on the inventory’s worth simply 9 months earlier.

Palihapitiya appeared to voice his assist for the short-squeeze on Jan. 27 when he advised interviewers on CNBC that the GameStop saga was an instance of the person on the road pushing again towards the person on Wall Road.

Einhorn mentioned that “quasi-anarchy” now reigns, based mostly on what he sees as toothless regulation of the inventory market. Einhorn in contrast the state of affairs, the place “the legal guidelines don’t apply to [Elon Musk],” to the defunding of the police power.

“Many who would by no means assist defunding the police have supported — and for all intents and functions have succeeded — in nearly fully defanging, if not defunding, the regulators,” mentioned Einhorn.

Beforehand, Musk was recommended to have unduly influenced the cryptocurrency market together with his vocal assist of Bitcoin (BTC) and Dogecoin (DOGE) through Twitter. Authorized professionals recommended in February that Musk’s tweets could have acted as a catalyst for the cash’ features on the time and warned that such tweets might appeal to consideration from america Securities and Change Fee.

Musk laughed off the suggestion on the time, claiming that he would welcome any SEC investigation into his tweets and that he merely preferred “canines and memes.”