By now you’re probably sick and tired of hearing about Reddit WallStreetBets day traders, greedy short-selling hedge fund guys and the dracula-looking CEO of RobinHood.
Today, they’ll be hauled before Congress. Lawmakers who know nothing about the securities markets will pretend that they do. As they start asking the Wall Street professionals questions, it will become cringingly obvious that they’re way out of their leagues. These “show trials” are primarily a means for the congressmen and women to get themselves on television.
For those who haven’t been following this alleged massive market manipulation and pump-and-dump scheme, we offer a brief background of all the players involved.
Billionaire Hedge Fund King, Ken Griffin
Griffin is the guy behind one of the largest and most successful hedge funds—Citadel. He also has a market-making business, which takes care of all the order flow from the Robinhood trading platform.
Citadel’s hedge fund and trading businesses is important since it benefits from the day traders on the Robinhood app. Griffin, along with fellow billionaire Steve Cohen, who now owns the New York Mets, bailed out fellow hedge fund honcho Gabriel Plotkin, the head of Melvin Capital, after the Reddit traders screwed with Plotkin’s short sales, drove up the price in “meme stonks” (like AMC) and nearly broke the fund. If it wasn’t for the multibillion-dollar bailout, good ol’ Plotkin would’ve had his face ripped off.
Vlad Tenev, The Dracula Looking Dude Who’s The CEO of RobinHood
Vlad Tenev co-founded the online brokerage firm Robinhood in 2013. His schtick was “democratizing finance for all,” by offering commission-free trading.
In plain English, this means giving Gen-Zers and younger Millennials the ability to cheaply trade stocks and options, even if they have no clue what they’re doing. Tenev gamified investing, making it feel as the novice investors aren’t really gambling with their life’s savings. The platform feels like you’re playing video games instead of buying stock on a fuddy-duddy stodgy site, like Charles Shwab.
Tenev was born in Bulgaria, grew up in the Washington, D.C. area, earned a math degree at Stanford University and now runs an app that has over 13 million customers and is worth about $20 billion. The company, before the recent controversy, planned to go public with an IPO this year.
Tenev will be grilled about his decision to restrict trading in the “story stonks,” causing outrage amongst his users. It later came to light that Tenev needed a cash injection of roughly $3 billion to stay in business. He may also be asked how was a novice investor, a college kid allowed to incur what he thought was $700,000 in losses. Alex Kearns died by suicide, falsely believing that he lost all of this money.
The Short-Selling Hedge Fund Bro, Gabe Plotkin
According to Reuters, Gabriel Plotkin is one of the world’s most successful hedge fund investors. Melvin Capital, which produced outsized gains, was named after his grandfather, a small businessman.
Plotkin started out at SAC Capital Advisors, which had a run-in with the regulators. He left the fund when SAC pleaded guilty to insider trading charges, but maintained a close relationship with Cohen, who kindly kicked in a cool $1 billion to get Plotkin’s fund jumpstarted.
Plotkin, flush with cash, paid about $44 million for mansions by Miami’s Biscayne Bay. He also holds a stake in the Charlotte Hornets basketball team. Sadly, during the Reddit day traders battle with Melvin Capital, Gabe’s fund lost 53% of its value.