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Michael Burry, head of Scion Asset Management and a major character in The Big Short movie which was based on Michael Lewis’s book of the same name.
Astrid Stawiarz / Getty Images
A high-profile investor in
GameStop
called the recent rise in the stock ‘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
Twitter
that he believes there should be legal ramifications for what is happening with GameStop trading. Burry made a substantial investment in GameStop in 2019, noting that he is happy for investors who have made money after his initial investment in the store.
“If I put $ GME on your radar, and you did it right, then I’m genuinely happy for you,” he wrote in a quickly deleted Tweet on Tuesday. “But what’s going on now – there should be legal and regulatory ramifications. This is unnatural, insane and dangerous. “
Burry told Barron’s in an email that he deleted the message for tagging the wrong SEC Enforcement account. After publication, Burry reposted the same comment, this time tagged with the correct account.
GameStop shares are up more than 3.415% in the past 12 months, thanks to a wave of enthusiasm from retail investors and crushing short sellers. The stock’s sky-high short-term yield was the target of speculative traders on Reddit’s WallStreetBets forum. It has been a favorite among that crowd for months, and their faith has paid off. This month’s rise was initially kicked off by an announcement that Chewy co-founder Ryan Cohen and two former executives from the ecommerce company would be joining GameStop’s board. Cohen’s RC Ventures owns approximately 13% of GameStop stock.
In August 2019, when GameStop shares were below $ 4 a share, Burry announced a 3% stake in the company. Burry thought the stock was undervalued, pointing to GameStop’s balance sheet and predicting that the next generation of video game consoles, due out in late 2020, would still include disk drives, adding to GameStop’s relevance.
Burry’s company sold more than a million GameStop shares, or about 38% of its stake, in the September 2020 quarter, according to a SEC filing. Burry did not immediately send a follow-up email asking if he still owned stock.
Burry’s investment has proven hugely successful for those who followed and held him last week. GameStop shares closed 92% to $ 147.98 on Tuesday and the shares flew higher in after-hours trading following a shoutout from Tesla CEO Elon Musk.
GameStop representatives did not immediately return a request to comment on the stock’s movement.
Write to Connor Smith at [email protected]