Home > activity > [crash game money]Michael Burry reportedly says Reddit-favored meme stocks will crash as new money dries up

[crash game money]Michael Burry reportedly says Reddit-favored meme stocks will crash as new money dries up

Time:2021-08-21 01:25:08


  According to Barron’s, he believes the speculative trading propping up these meme stocks could soon hurt regular investors.

  GameStop made Wall Street history in January with its monstrous short squeeze that pushed the stock up 400% in one week. The video game retailer became a star on Reddit’s WallStreetBets forum, where retail traders aimed to push stock prices higher and squeeze out short selling hedge funds.

  The trading mania revived last month as Reddit traders continued to pile into their favorite meme stocks including GameStop, AMC Entertainment and others.

  While the frenzy has cooled as of late, these stocks are still up an unimaginable amount. GameStop has surged more than 1,000% in 2021, while AMC is up over 2,500% this year.

  Retail investors represent about 10% of all trades in the market currently, according to a recent Morgan Stanley report. This level has come down since the third quarter of 2020 when retail investing was 15% of all trades during pandemic-induced retail frenzy; however, the current figure is still in the 82nd percentile.

  GameStop?has taken advantage of its massive rally to raise new capital to accelerate its e-commerce transformation.?Last week, the video game retailer said it sold 5 million additional shares, raising $1.13 billion in capital. That’s on top of an offering of 3.5 million additional shares in April, which raised $551 million for the company.

  ”This is a Godsend for these companies,” Burry told Barron’s.

  Click here for the full Barron’s article.

  — CNBC’s Yun Li and Maggie Fitzgerald contributed to this report

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