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Michael Burry’s bullish stance on GameStop Corp. in 2019 helped lay the groundwork for one of the biggest retail investor frenzies of recent years. Now famous fund manager is warning GameStop is manic the rally got out of hand.
“If I put $ GME on your radar, and you did well, I’m really happy for you, ”said Burry, best known for his premonitory bet against mortgage-backed securities before the 2008 financial crisis, in a tweet Tuesday. “However, what’s going on right now – there should be legal and regulatory implications. It is unnatural, senseless and dangerous. “
Photographer: Astrid Stawiarz / Getty Images
Read more: How WallStreetBets pushed GameStop actions to the Moon
Burry is “neither long nor short” from GameStop, he said in a brief email response to Bloomberg’s questions on Tuesday. His investment company held a 2.4% stake as of Sept. 30 after reducing its stakes in the third quarter, according to regulatory documents compiled by Bloomberg.
Burry, who became a household name after his mortgage business was featured in “The Big Short, ”helped grab attention on GameStop as early as mid-2019, when its Scion Asset Management unveiled a 3.3% stake in the besieged video game retailer and urged the company to buy back shares. His position has been cited by some of the traders who have flooded online forums in recent weeks with posts pleading with fellow punters to buy.
GameStop’s 642% surge since Jan. 12, plus another 41% gain in after-hours trading on Tuesday, captivated Wall Street, drew a Tweeter Elon Musk and blocked short sellers including Gabe Plotkin’s Melvin Capital and Andrew Left’s Lemon research. It has also prompted calls for a Securities and Exchange Commission investigation, although experts say difficult to prove that chat messages are part of a scheme manipulate the market.
(Updates with Burry’s comment in the third paragraph.)
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