The real Wolf of Wall Street has declared the current stock market revolution a ‘paradigm shift’.
Former stockbroker Jordan Belfort spoke to Fox News on Monday night. The ‘brilliant’ uprising of retail investors last week after the share price of video game retailer GameStop rose dramatically when a group of Reddit users teamed up to buy up the struggling retailer’s buying options – hurting market short sellers.
“The guy is finally equipped, information travels now immediately, it used to be just the big guys, they paid the analysts … so the guy finally has the ability to play the same game, at least a little bit,” Belfort said. said. “And there’s going to be a radical change, it’s not going to be the same.”
“I believe it’s a paradigm shift right now,” said Belfort, who spent 22 months in jail after pleading guilty to fraud and money laundering in 1999 and has since rebuilt his life as a motivational speaker.
The true Wolf of Wall Street, Jordan Belfort, said the increase in GameStop shares last week was the beginning of a paradigm shift in stock trading.
GameStop shares rose below $ 20 in January and closed around $ 350 last Wednesday, peaking at $ 483 at one point, while a voluntary host of social media investors challenged large institutions to place bets on the market. placed that the share would fall.
The action was even wilder the next day when the stock swung between $ 112 and $ 483. On Monday, the stock was 30% lower than last week at $ 225 a share.
‘There are hedge funds that are collapsing and will literally shorten a stock to almost zero. “They’re trying to spread negative news, investigations, and that’s what’s seen with GameStop, ” Belfort said.
‘I think everyone knows there is something wrong with their stomachs. You can silence people, you can deplat people … and get away with it. Everyone knows – there’s something wrong – Republican or Democrat. That’s why both sides of the aisle have joined forces on this one thing, ‘he continues.
In an interview with Tucker Carlson, left, on Fox News, Belfort explained how the stock soared when a volunteer army of investors challenged large institutional hedge funds.
Belfort’s crimes were set out in his first memoir, The Wolf of Wall Street, which was later changed to the 2013 cartoon of the same name, starring Leonardo DiCaprio.
The film – directed by Martin Scorsese – describes the boyish, fast-talking Belfort’s antics as chairman of Stratton Oakmont Inc., the firm he started with a few desks and phones set up in a former Long Island car dealership. .
Stratton Oakmont, now known as a ‘boiler room’, marketed penny stocks – of minimal value – and deceived investors with the ‘pump-and-dump’ type of stock sales, with large commissions for trading, often at the expense of their investors.
GameStop shares rose below $ 20 in January, peaking at $ 483
Stratton Oakmont earned a fortune by using deceptive, high-pressure tactics to sell penny stocks at high prices. After the value artificially pushed up, Belfort and others dumped their own shares before prices plummeted.
Speaking of today’s adults, Belfort explained how short sellers are investors who speculate that the price of a stock or bond will fall in value.
According to the strategy, they borrow shares to sell it with the hope of buying it back at a lower price in the future.
An army of amateur investors who used the WallStreetBets forum on the online platform Reddit as a rallying point sabotaged short sellers last week with a massive campaign to buy shares, which raised prices.
Amateur investors managing rich hedge funds have fascinated the financial press and disrupted the stock market.
On Monday, the stock fell 30% from $ 316 per share to end the day’s trading at $ 225
The chart of the past week shows that the shares fluctuate while amateur investors have increased the price
A month ago, the stock traded at about $ 17 a share before getting a big boost
Belfort praised small-scale investors ‘angry as hell’ who were “sick and tired of bumping through Wall Street, which they have been forever.”
“My hat is by the way from them,” he said. “It’s brilliant what they did. They found a real inefficiency in the market and a gap where something was dramatically too short and that they could actually get enough purchasing power. Eventually they now have ammunition to fight back.
“The danger is that it will end badly for these stocks and I hope people do not lose money in the process.”
A group of protesters are being brought together by the New York Stock Exchange (NYSE) building to protest Robinhood and bring their voice to Wall Street trading amid the GameStop stock chaos.
The three million strong group of amateur investors on the Reddit forum exchange tips and boast of beating ‘the system’. Some analysts described the situation as a ‘nerds vs Wall Street’ battle.
But Belfort said last week: ‘If you can prove they’re actually working together, it’s going to be illegal.
The problem is that it’s a kind of loose collision where one person says, ‘Let’s stick together and stay strong. ‘And in theory it’s illegal.
‘But I doubt the SEC [U.S. Securities and Exchange Commission] would try to make a case out of something like that.
‘I think what you need to realize is that money can be made for the average person and that money is lost. You have to be really careful. ‘
Belfort spent 22 months in jail after pleading guilty to fraud and money laundering in 1999, and has since rebuilt his life as a motivational speaker. His crimes were set out in his first memoir, The Wolf of Wall Street, which was later turned into the 2013 blockbuster of the same name, starring Leonardo DiCaprio, in the photo.
Belfort pleaded guilty in 1999 and agreed to become a government witness in a case against an accountant and other defendants of stock fraud accused of stealing the firm’s books and money in a fake holding company and overseas bank accounts. fed.
In 2003, after a broken marriage and a battle with drug addiction, Belfort was sentenced to 3 years in prison and ordered the $ 110 million restitution to disappear by giving 50 percent of his future earnings to the government.
Stratton Oakmont at one point employed more than 1,000 stockbrokers and was involved in stock issues of more than $ 1 billion, including the back of the initial public offering for the shoe company Steve Madden Ltd.
Belfort served 22 months at the Taft Correctional Center in Taft, California, in exchange for a plea deal with the Federal Bureau of Investigation for the pump-and-dump scams he led, which resulted in investors earning about $ 200 million and he was paid to pay. $ 110.4 million back that he defrauded of stock buyers.
Belfort shared a cell with Tommy Chong while serving his sentence, and Chong encouraged Belfort to write about his experiences as a stockbroker. He now earns his money as a writer and motivational speaker.
THE MARKET WINNER WHO LOVES LIFESTYLE AND DODGY TRADE HIM FROM ESTATE TO PRISON
Belfort, of The Bronx, New York, started as a dealer at LF Rothschild, but claims to have been fired after the market crash in 1987. He claims to have founded Stratton Oakmont with friends, although other sources say he and his partners bought. the original founder out.
Stratton Oakmont was a ‘boiler room’ that marketed penny stocks – those of minimal value – and deceived investors with the ‘pump-and-dump’ type of stock sales, with large commissions on the trades, often at the expense of their investors. . During his years in Stratton, Belfort developed a lifestyle of lavish parties and heavy use of recreational drugs, especially metacwalon – known under the brand name Quaalude – to which he became addicted.
Jordan Belfort served 22 months in prison
Stratton Oakmont once employed more than 1,000 stockbrokers and was involved in more than $ 1 billion in stock spending, including the back of the initial public offering for the shoe company Steve Madden Ltd. The firm’s fame, gained by law enforcement throughout virtually its entire history, inspired the films Boiler Room (2000), about unscrupulous market traders, and biography The Wolf of Wall Street 2013.
The National Association of Securities Dealers (now the Financial Industry Regulatory Authority) began pursuing Stratton Oakmont in 1987, and they eventually brought about the permanent strike in 1995. Belfort was then charged with security fraud and money laundering.
Belfort served 22 months at the Taft Correctional Center in Taft, California, in exchange for a plea deal with the Federal Bureau of Investigation for the pump-and-dump scams he led, which resulted in investors earning about $ 200 million and he was paid to pay. $ 110.4 million back that he defrauded of stock buyers.
Belfort shared a cell with Tommy Chong while serving his sentence, and Chong encouraged Belfort to write about his experiences as a stockbroker. He now earns his money as a writer and motivational speaker.