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How much jet fuel is needed to send GameStop, Bitcoin, and Dogecoin to the moon?
Depending on where you stand on the GameStop saga, which saw coordinated retail traders extract $6 billion from Wall Street overnight, you can believe Elon Musk should be given less matches or given more.
In a letter to investors released Thursday, Tesla CEO and “Technoking” Elon Musk was accused of dumping “jet fuel” on the GameStop short squeeze at a crucial juncture by hedge fund manager David Einhorn, founder of Greenlight Capital.
Einhorn said that Elon Musk and venture capitalist Chamath Palihapitiya were the true instigators of the short-squeeze, alleging that their tweets and TV appearances provided “the real jet fuel” for the pump.
According to Markets Insider, Einhorn wrote, “We note that the real jet fuel on the GME squeeze came from Chamath Palihapitiya and Elon Musk, whose appearances on TV and Twitter, respectively, at a critical moment further destabilised the situation.”
During the GameStop short-squeeze organised by redditors on r/WallStreetBets, Elon Musk tweeted what some perceived as his support for the endeavour. Musk tweeted the word “Gamestonk!!” with a post to the WallStreetBets sub-reddit on Jan. 26, shortly after GME stock had risen 91 percent in a single day.
GME shares surged 134 percent over the next 24 hours, rising from a unit price of $147 to $347. The next 24 hours saw still more explosions, and by Jan. 28, the valuation of GameStop shares had reached an all-time high of $483 — a rise of 18,693 percent from the stock’s value just nine months ago.
On Jan. 27, Chamath Palihapitiya seemed to accept the short squeeze when he told CNBC interviewers that the GameStop saga was an indication of the guy on the street fighting back towards the man on Wall Street.
According to Einhorn, “quasi-anarchy” now reigns due to what he sees as toothless capital market oversight. Einhorn contrasted the case in which “the laws do not apply to [Elon Musk]” to the police department being underfunded.
“Many who would never support defunding the police have supported — and for all intents and purposes succeeded — in nearly completely defanging, if not defunding, the regulators,” Einhorn added.
Elon Musk was already accused of undue dominance in the cryptocurrency industry due to his outspoken advocacy for Bitcoin (BTC) and Dogecoin (DOGE) on Twitter. In February, legal professionals speculated that Musk’s tweets could have served as a spark for the coins’ gains at the time, and cautioned that such tweets could draw SEC scrutiny.
Musk dismissed the idea at the time, saying he would support any SEC investigation into his tweets and that he really liked “dogs and memes.”