Michael Burry’s positive attitude about GameStop Corp. in 2019 laid the foundation for one of the largest retail investors in recent memory. Now the famed fund manager warns that GameStop is manic rally got out of hand.
‘If I sit $ GME on your radar, and you did well, I’m really happy for you, ‘Burry, best known for his preliminary bet against mortgage bonds before the 2008 financial crisis, said in a tweet Tuesday. “However, what is going on now – there must be legal and regulatory consequences. It is unnatural, insane and dangerous. ”
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Burry is GameStop “neither long nor short”, he said in a short email response to Bloomberg’s questions on Tuesday. Its investment firm owned a 2.4% stake on September 30 after splitting its stake in the third quarter, according to government documents compiled by Bloomberg.
Burry, who became a household name after his mortgage, appears in ‘The Big Short, ”helped draw attention to GameStop as early as mid-2019, when it launched Scion Asset Management revealed a 3.3% stake in the beleagured retailer for video games and urged the company to buy back shares. Some of the traders who have flooded online forums over the past few weeks with posts asking their teammates to buy have quoted his point of view.
GameStop’s 642% rise since January 12, plus a 41% increase in after-hours trading, has mesmerized Wall Street and a tweet of Elon Musk and short sellers, including Gabe Plotkin’s, stopped Melvin Capital and Andrew Left’s Lemon research. It also prompted an inquiry into the Securities and Exchange Commission, although experts believe it is difficult to prove that chat room messages are part of an illegal schedule to manipulate the market.
(Updates with Burry’s comment in third paragraph.)