Wednesday, November 29, 2023

Michael Burry Calls GameStop Rally “Unnatural, Foolish, Dangerous” | Arts and Culture News

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Michael Burry, of The Big Short fame, took an optimistic stance on GameStop in 2019, but now warns that the rally has gotten out of hand.

Michael Burry’s bullish stance on GameStop Corp. in 2019 helped lay the groundwork for an epic retail investor frenzy. Now the famous fund manager is warning that the rally has gotten out of hand.

“If I put $ GME on your radar, and you’ve done right, I’m really happy for you,” said Burry, best known for his premonitory bet against mortgage securities before the 2008 financial crisis, in a tweet Tuesday. . “However, what’s happening now – there should be legal and regulatory implications. It is unnatural, senseless and dangerous. “

[File: Bloomberg]

Burry, whose investment firm said it had a 2.4% stake in GameStop as of September 30, said in an email interview on Tuesday that it was no longer long or short. He declined to comment when he sold the stock.

Burry became a household name after his mortgage business was featured in “The Big Short”. It helped draw attention to GameStop in mid-2019 after Scion Asset Management unveiled a 3.3% stake in the beleaguered video game retailer and urged the company to repurchase shares. Burry’s involvement was cited by some of the traders who flooded online forums in recent weeks with posts begging their fellow punters to buy.

GameStop’s 642% rise since Jan. 12 has captivated Wall Street, sparked a tweet from Elon Musk, and hijacked short sellers including Gabe Plotkin’s Melvin Capital and Andrew Left’s Citron Research. It has also prompted calls for an investigation by the Securities and Exchange Commission, although legal experts say it is difficult to prove that the posts in the discussion forums are part of an illicit scheme to manipulate the market.

Burry’s warning has so far not dampened the enthusiasm of retail investors: GameStop is still up 45% in pre-market trading at 8:38 a.m. in New York, although it has more than doubled in the night trading.


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