Michael Burry, famous for The Big Short, took a position on GameStop in 2019, but now warns that the rally has gotten out of hand.
Michael Burry’s optimistic position towards GameStop Corp. in 2019 it helped lay the groundwork for an epic frenzy of retail investors. Now the famous fund manager warns that the rally has gotten out of hand.
“If I put GME $ on your radar and you did it right, I’m really happy for you,” Burry, best known for his predictable bet against mortgages before the 2008 financial crisis, said in a tweet. Tuesday. “However, what is happening now – should have legal and regulatory repercussions. This is unnatural, crazy and dangerous. “
[File: Bloomberg]
Burry, whose investment firm reported holding a 2.4% stake in GameStop since Sept. 30, said in an email interview Tuesday that it is now “neither long nor short.” He declined to comment when he sold the share.
Burry became a household name after his mortgage deal was featured in “The Big Short.” He helped draw attention to GameStop in mid-2019, after Scion Asset Management revealed a 3.3% stake in the besieged video game retailer and asked the company to buy back shares. Burry’s holding was quoted by some of the traders who have flooded online forums in recent weeks with messages begging their betting colleagues to buy.
GameStop’s 642% increase on January 12 captivated Wall Street, tweeted from Elon Musk, and directed short sellers, including Melvin Capital, Gabe Plotkin, and Citron Research, by Andrew Left. It has also stimulated the call for an investigation by the Securities and Exchange Commission, although legal experts say it is difficult to prove that chat room stations are part of an illicit market manipulation plan.
Burry’s warning has so far done little to dampen retail investors’ enthusiasm: GameStop has risen 45% in pre-market trading since 8:38 a.m. in New York, although it has doubled in overnight trading.