Reddit users on WallStreetBets (WSB) drew accusations of “market manipulation” last week as they cost hedge funds billions of dollars by driving up the price of GameStop and other struggling stocks, but hedge funds and billionaires have a long history of playing games with the market themselves.
The share price of GameStop has come tumbling back towards earth, and the market has recovered from losses sustained at the peak of the WSB episode. But some billionaires like Leon Cooperman have continued to bash WSB and decry calls to increase taxes and regulations on billionaires. Here are five times billionaires and hedge funds played stock market games like some of them now accuse WSB of doing:
New York Hedge fund billionaire Leon Cooperman just now on CNBC:
“People are sitting at home getting their checks from the government. This ‘fair share’ is a bullshit concept and is just a way to attack wealthy people.” pic.twitter.com/9jhwSaSH9t
— Alex Salvi (@alexsalvinews) January 28, 2021
Bill Ackman Profits From The COVID-Crash
Chief of hedge fund Pershing Square Capital Bill Ackman appeared on CNBC in Mar. 2020, as the coronavirus pandemic was beginning to tighten its grip on the American economy, and warned of a deep recession and and collapsing businesses if the government didn’t institute widespread shutdowns. “Hell is coming,” the billionaire said. The Dow Jones Industrial Average, which was already down big on the day, halted trading temporarily during Ackman’s interview and was down 2,000 points when trading reopened.
Meanwhile, Ackman was purchasing shares and made billions in the ensuing months after his doomsday predictions. (RELATED: ‘Worst On Record’: The Numbers Are In, And So Far Wall Street’s Hedges Took An Absolute Bath Thanks To Reddit)
Carl Icahn Makes $1 Billion Hyping Up Herbalife
Billionaire Carl Icahn infamously got into a spat with the aforementioned Ackman on CNBC back in 2013 regarding the multilevel marketing company Herbalife. Ackman was shorting the company, betting the stock price would go down, and was discussing his decision in an interview with CNBC.
Icahn called into CNBC to defend Herbalife and verbally spar with Ackman, calling him a liar. Weeks after the highly-publicized kerfuffle, Icahn bought up a huge number of shares in Herbalife, and made out years later with a massive profit. “On paper, I made a billion,” he told CNBC in 2018.
Leon Cooperman Settles With SEC Over Insider Trading
Cooperman was accused of purchasing shares and bonds in Atlas Pipeline Partners in 2010 ahead of the company’s sale of a natural gas processing facility. Cooperman was made aware of the deal eight days before the public, and shares of Atlas rose 31% once the rest of the world knew about the sale.
As part of a settlement in 2017, Cooperman and his firm Omega Advisors agreed to pay fines of nearly $5 million.
Jamie Dimon Bashes Bitcoin
In 2017, JP Morgan chief executive Jamie Dimon called Bitcoin a “fraud” and sent the cryptocurrency’s price through the floor. A few days after his widely-circulated comments, JP Morgan was one of the most active buyers of Bitcoin tracking fund Bitcoin XBT.
JP Morgan denied any wrongdoing, saying that they were simply acting as a broker for clients who wanted to buy into the fund. Still, the price of Bitcoin fell 24% in the days between Dimon’s comments and the XBT trades, netting JP Morgan and its clients big gains. (RELATED: Are We Heading Toward An Apocalyptic Market Correction?)
Elon Musk Sends Tesla Skyrocketing With A Weed Joke
Although it didn’t end up helping him in the long run, Elon Musk made himself a nice profit with a 2018 joke in which he tweeted the following: “Am considering taking Tesla private at $420. Funding secured.”
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Musk ended up getting in trouble with the Securities and Exchange Commission and having to relinquish some power at Tesla over the incident, but not before Tesla’s share price shot up from $340 to a peak of $390 as investors scrambled to get a stake in the potentially soon-to-be-private company.