Michael Burry, of The Big Short fame, took a bullish position at GameStop in 2019, but now warns that the rally has gotten out of hand.
Michael Burry’s bullish position on GameStop Corp. in 2019 helped lay the groundwork for an epic retail investor frenzy. Now the famous fund manager warns that the rally has gotten out of hand.
“If I put $ GME on your radar and you’ve done well, I’m really happy for you,” Burry, best known for his previous bet on mortgages before the 2008 financial crisis, said in a tweet. however, what is happening now should have legal and regulatory implications. This is unnatural, crazy and dangerous. “
[File: Bloomberg]
Burry, whose investment firm reportedly owned a 2.4% stake in GameStop on Sept. 30, said in an email interview Tuesday that it is now “neither long nor short.” He declined to comment when he sold the stock.
Burry became famous after his mortgage business appeared in “The Big Short.” It helped draw attention to GameStop in mid-2019 after Scion Asset Management announced a 3.3% stake in a harassed video game retailer and urged the company to buy shares. Some of the traders who have flooded online forums in recent weeks have cited Burry’s involvement with posts imploring the purchase of his playmates.
GameStop’s 642% increase since Jan. 12 has captivated Wall Street, sparked a tweet from Elon Musk, and sent short sellers, including Gabe Plotkin’s Melvin Capital and Andrew Left’s Citron Research. It has also spurred the request for an investigation by the Securities and Exchange Commission, although legal experts say it is difficult to prove that chat room publications are part of an illicit scheme to manipulate the market.
Burry’s warning so far has done little to dampen the enthusiasm of retail investors: GameStop rose another 45% in pre-market trading from 8:38 a.m. in New York, though it had doubled in trade overnight.