Genius Fund Hedge, which started a 4,800% GameStop Rally, now says it is “unnatural, cowardly and dangerous”.

In April, Dr. Michael Burry, a hedge fund investor who made millions of short-term subprime mortgages in the 2008 crisis and was dramatized by Christian Bale in “The Big Short,” played to bold at the depths of the Coronavirus pandemic.

Burry hedge fund Scion Asset Management revealed that it had bought 5.3% of GameStop sick video game vendors

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at between $ 2 and $ 4.2 a share, costing about $ 15 million in total. Burry ‘s play was to persuade GameStock to use its money and buy back its stock, which could account for the retirement of about half of its outstanding shares. In a harshly worded letter to the GameStop board of directors, Burry asked the company to withdraw their $ 300 million purchase permit by repurchasing stock. At the time of his letter, GameStop’s total market cap was just $ 300 million.

Burry’s play has helped knock out one of the most wackiest and most out of control trades in financial history, which has turned into billions of dollars in paper profits for some investors, speculators or -professional, and caused potentially billions in losses for some of the world’s largest. smart hedge property.

GameStop has risen from a low of $ 2.57 when Burry lifted its position this spring, to more than $ 240 in after-hours trading as used by a group of amateur speculators Reddit social media app to GameStop scarce stock corner. The upcoming rise in GameStock shares has created pressure that reminds us of Volkswagen’s rise in 2008 to a half-trillion dollar market cap at the depth of the 2008 crisis, which resulted in about $ 30 billion in losses hedge property.

Persuading investors like Burry, GameStop bought around $ 200 million in stocks by 2020, reducing outstanding shares by more than 30%. The repurchases, coupled with a large pledge of hedge funds against GameStop as it suffers from a decline in indoor video game sales and general brick and mortar malaise, meant that to the end of 2020 as one of the shortest stocks in the world.

Enter the Reddit r / wallstreetbets thread, where posters have been trying to push out a GameStop bear and pump up company stock. How GameStop built momentum due to the addition of Chewy

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founder Ryan Cohen as an investor and surrendering PlayStations sales, Redditors began smelling blood in the water. Social media-driven pressure has occurred in January, which has gained an 881% gain in GameStock shares over the past month.

The battle royale resembles a similar show about 15 years ago, although one was between professional traders, compared to today’s feather, where a complete amateur takes big money. In 2006, billionaire John Arnold v. Brian Hunter of Amaranth fund advisers began a calendar trade (late March / short April) in natural gas futures. The duel made Arnold a fortune, but it cost Amaranth $ 6 billion and caused the fund to collapse.

With GameStop’s valuation going up to $ 14 billion, making some retail traders like a millionaire, it has been at the expense of some of the most successful hedge funds in the world. Melvin Capital hedge fund, one of the largest summaries published by GameStop, has lost ship weight on GameStop pressure. it was reportedly down 30% from Monday, according to the Wall Street Journal, and needed $ 2.7 billion in funding from billionaires Ken Griffin and Steven A. Cohen of Citadel and Point 72 Asset Management, respectively, to stay away.

As the press turned into a Wall Street fiasco that was once in a decade, hosting rubbers, two of Silicon Valley’s biggest upgrades, Elon Musk and investor Chamath Palihapitiya.

Palihapitiya was trading into the press, buying call options on GameStop, which were likely to accelerate their pressure on Tuesday afternoon. Following Palihapitiya’s tweet, GameStop rose from the $ 90s to close at $ 147.98.

Minutes after the market closed, Musk joined the party with even more powerful results. With tens of millions of enthusiastic fans around the world and a knot for moving stock with a single, incredible tweet, Musk simply wrote, “Gamestonk.” It linked to the Reddit thread where the tension was coordinated. That was good enough to skyrocket 43% in GameStock shares in after-hours trading.

Now, GameStop hedge fund bull Michael Burry is probably saying that the man who instigated the current conditions with his big call back, says the current tensions are “mis -natural, cowardly and dangerous. ” In a tweet, Burry said there should be legal and regulatory implications from GameStop’s promotion.

Perhaps, Burry is trying to put a roof on a Pandora’s Box that helped him open. Or it could be suffering from a bit of FOMO, or fear of missing out. The 3.4 million shares Burry bought were worth about $ 15 million $ 710 million at current prices, leaving it nearly a billion.

Unfortunately for Burry, secure movies have been reviewed by Forbes indicated that he sold his GameStock before the sport began. As of Sept. 30, Burry had just 1.7 million shares and is more likely to have continued to sell as GameStop tore in at the end of the year.

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Surge Massive GameStop creates new billionaire as Reddit dealers bet against Wall Street