DoubleLine CEO Jeffrey Gundlach, known as ‘The Bond King’, provides insight into the short press and how investors came here, as well as the political and financial divisions in the US.
Government stimulus controls aimed at curbing the U.S. economy from the economic slowdown caused by the COVID-19 pandemic are mostly to blame for the volatility in the shares of companies like GameStop Corp., according to Jeffrey Gundlach, billionaire bond fund manager.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| GME | GAMESTOP CORP | 325.00 | +131.40 | + 67.87% |
GameStop Corp. Shares have risen 1,545% since Jan. 12 after a group of investors joined forces on the WallStreetBets message board on discussion site Reddit to catch short-sellers who bet against the company and others, who they say have weak fundamentals.
GAMESTOP STOCK SHORT SELLER LOSES TOTAL MORE THAN $ 19B, DATA FIRM SS
“I think the government’s stimulus is ultimately the cause,” Gundlach, chief executive and chief investment officer of DoubleLine Capital in Los Angeles, which has $ 148 billion in assets under management, said in an exclusive interview with FOX Business on Friday. Charles Payne said. .
The U.S. government began sending $ 600 checks to most Americans on December 29, making the second round of direct payments since the COVID-19 pandemic began in March 2020.
The first series fueled a day-trading craze that should not have disappointed yet, as Americans have more time to monitor their investments while working remotely.
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According to housework and volatility, the number of households increased by more than 50% last year, according to Charles Schwab, and an increase in trading volume. Last year, SEC Chairman Jay Clayton expressed his concern about the increase in retail that Maria Bartiromo of FOX Business said. “I want to make sure our retail investors know that there are risks associated with all kinds of leverage,” he said. The SEC is monitoring current developments.
Gundlach said 2.1 million investors organized on the message board and put together $ 20 billion in buying power that gave a knockout blow to the short sellers who built up a position amounting to 150% of the outstanding shares.
The money enabled investors, or speculators, to lift the hedge funds and force them to cover their short bets for significant losses, Gundlach explained.
CITADEL SHOOTS DOWN ROBINHOOD LINK
Hedge fund Melvin Capital received a $ 2.75 billion injection on Monday from two other hedge funds after suffering losses of almost 30% annually.
“The hedge funds can do what they want, but if they act unintentionally, they will eventually earn the trouble of their activities,” Gundlach said.