Michael Burry’s optimistic position towards GameStop Corp. in 2019 it helped lay the groundwork for one of the biggest retail investor frenzies in recent memory. Now the famous fund manager warns that GameStop is manic the rally got out of hand.
“It simply came to our notice then $ GME on the radar and you did well, I’m really happy for you, “Burry, best known for his predictable bet against mortgages before the 2008 financial crisis, said in a tweet on Tuesday. “However, what is happening now – should have legal and regulatory repercussions. This is unnatural, crazy and dangerous. “
Photographer: Astrid Stawiarz / Getty Images
Read more: How WallStreetBets pushed GameStop to send to the moon
Burry is neither “long nor short” in GameStop, he said in a short email response to questions from Bloomberg on Tuesday. Its investment firm held a 2.4% stake on September 30, after declining its holdings in the third quarter, according to regulatory documents compiled by Bloomberg.
Burry, who became a household name after his mortgage deal was filed in “The big short “has helped draw attention to GameStop since mid-2019, when Scion Asset Management took place revealed a 3.3% stake in the besieged video game retailer and urged the company to buy back shares. His position was quoted by some of the traders who have flooded online forums in recent weeks with posts begging their betting colleagues to buy.
GameStop’s 642% increase since January 12, plus a 41% gain in trading after Tuesday, captivated Wall Street, attracted a tweet from Elon Musk and prevented short sellers, including Gabe Plotkin’s Melvin Capital and Andrew Left Citron Research. It also stimulated the request for an inquiry by the Securities and Exchange Commission, although experts say it is difficult-to-prove posts in the chat room are part of an illicit system to manipulate the market.
(Updates with Burry’s comment in the third paragraph.)