Michael Burry, of The Big Short fame, took a positive stance on GameStop in 2019, but now warns that the protest has gotten out of hand.
Michael Burry’s bullish stance on GameStop Corp. in 2019 laid the foundation for an epic frenzy for retail investors. Now the famed fund manager warns that the rally has gotten out of hand.
“If I put $ GME on your radar, and you did well, I’m really happy for you,” Burry, best known for his prospective commitment to bond effects before the 2008 financial crisis, said in a tweet on Tuesday. “However, what is going on now – there must be legal and regulatory consequences. It is unnatural, insane and dangerous. ”
[File: Bloomberg]
Burry, whose investment firm reported on September 30 that he owns a 2.4% stake in GameStop, said in an email interview on Tuesday that he is now “neither long nor short.” He declined to comment on when he sold the stock.
Burry became a household name after his mortgage loan appeared in “The Big Short”. He is helping midway through attention at GameStop mid-2019 after his Scion Asset Management revealed a 3.3% stake in the beleagured video game retailer and urged the company to buy back shares. Burry’s share is cited by some traders who have flooded online forums over the past few weeks with posts urging their teammates to buy.
GameStop’s 642% rise since Jan. 12 has mesmerized Wall Street, eliciting a tweet from Elon Musk and eliciting short sellers, including Melvin Capital from Gabe Plotkin, and Citron Research from Andrew Left. It also prompted an investigation into the Securities and Exchange Commission, although legal experts believe it is difficult to prove that classroom posts are part of an illegal scheme to manipulate the market.
Burry’s warning has done little so far to dampen the enthusiasm of retail investors: GameStop has risen 45% in pre-market trading in New York since 8:38 p.m., though overnight trading has more than doubled.