Michael Burry’s optimistic attitude to GameStop Corp. in 2019 helped lay the groundwork for one of the greatest retail investor frenzy in recent memory. Now the famous fund manager is warning that GameStop is manic rally has gotten out of hand.
“If I $ GME on your radar, and you did well, I’m genuinely happy for you, ”Burry, best known for his foresight against mortgage securities before the 2008 financial crisis, said in a tweet Tuesday. “But what’s going on now – there should be legal and regulatory ramifications. This is unnatural, insane and dangerous. “
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Read more: How WallStreetBets Pushed GameStop Stocks to the Moon
Burry is “neither long nor short” at GameStop, he said in a brief email response to questions from Bloomberg on Tuesday. His investment firm owned a 2.4% stake as of Sept. 30 after a third-quarter split of its interests, according to Bloomberg’s compiled filings.
Burry, who became a household name after his mortgage business was featured in ‘The Big Short, ”helped draw attention to GameStop back in mid-2019, when its Scion Asset Management disclosed a 3.3% stake in the beleaguered video game retailer and urged the company to buy back shares. His stance has been cited by some of the traders who have been flooding online forums in recent weeks with messages begging their fellow bettors to buy.
GameStop’s 642% increase since Jan. 12, plus an additional 41% gain in non-business trading on Tuesday, has captivated Wall Street tweet from Elon Musk and stunted short sellers, including Gabe Plotkin’s Melvin Capital and Andrew Left’s Citron Research. It has also sparked calls for an investigation from the Securities and Exchange Commission, although experts say it does hard to prove chat room posts are part of an illegal one regulation to manipulate the market.
(Updates with Burry note in third paragraph.)