A high-profile investor in
called the stock’s recent rise, “unnatural, insane, and dangerous.”
Investor Michael Burry, head of Scion Asset Management and a major character in The Big Short book and film, said in a now-deleted post on
that he believes there should be legal repercussions for what’s happening with GameStop trading. Burry made a substantial investment on GameStop in 2019 and noted that he’s happy for investors who made money following his initial investment in the retailer.
“If I put $GME on your radar, and you did well, I’m genuinely happy for you,” he wrote in a quickly-deleted Tweet on Tuesday. “However, what is going on now – there should be legal and regulatory repercussions. This is unnatural, insane, and dangerous.”
Burry told Barron’s in an email that he deleted the post because he tagged the wrong SEC Enforcement account. After publication, Burry reposted the same comment, this time with the proper account tagged.
GameStop stock is up more than 3,415% in the past 12 months, riding a wave of retail investor enthusiasm and crushing short sellers. The stock’s sky-high short interest was targeted by speculative traders on Reddit’s WallStreetBets forum. It’s been a favorite among that crowd for months, and their faith paid off big time. This month’s surge was initially kicked off by an announcement that Chewy co-founder
and two former executives of the e-commerce firm would join GameStop’s board. Cohen’s RC Ventures holds roughly 13% of GameStop shares.
In August of 2019, when GameStop shares below were $4 a share, Burry disclosed a 3% stake in the company. Burry thought shares were undervalued, pointing to GameStop’s balance sheet and predicting that the next generation of videogame consoles, due out in late 2020, would still include disc drives, extending GameStop’s relevance.
Burry’s firm sold more than a million GameStop shares, or about 38% of its stake, during the September quarter of 2020, according to an SEC filing. Burry did not immediately return a follow-up email asking whether he still held shares.
Burry’s investment has proved wildly successful for those that followed him in and held on through last week. GameStop stock closed up 92% to $147.98 Tuesday, and shares were flying higher in after-hours trading after a shoutout from Tesla CEO Elon Musk.
GameStop representatives did not immediately return a request seeking comment on the stock’s move.
Write to Connor Smith at [email protected]
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