Leon Cooperman He told CNBC on Thursday that he believes the Reddit-fueled trading craze involving GameStop stocks will end badly. However, the billionaire investor said he does not blame the people who unleashed the epic short squeeze, which has sent the stock soaring in recent days.
Cooperman said, “I don’t curse them. I only say from my experience, this will end in tears.” “Fast Money: Halftime Report,” Shares in the beleaguered video game retailer fell about 25%. Earlier in the session, GameStop stock touched an all-time high of $ 483 It has come under pressure as several retail brokerages have placed restrictions on trades.
“GameStop isn’t $ 500, it’s not $ 400, it’s not $ 300, it isn’t $ 200, not even $ 100, not even $ 50,” said Cooperman, the head of the Omega Family Office. He added that “investors” don’t own GameStop – only “speculators” own.
Cooperman said he believes the current moment in the stock market – including the online hype that is pumping heavily shortened stocks – is the result of many factors, including the near-zero interest rates the Federal Reserve has put in place in response to the coronavirus pandemic. He also said that the financial response from Congress is playing a role.
“Everything is interconnected,” said Cooperman, the son of a Bronx plumber who later became one of Wall Street’s most successful investors. “The reason the market does what it does is because people are sitting home, getting their checks from the government, and basically trading with no commissions and no interest rates. I’m not saying they’re stupid. Show me someone with a consistently good track record, and I’ll show you a smart man.”
Just last week, Cooperman was He warned of “euphoria” in parts of the exchange. GameStop shares traded under $ 50 on the day of Cooperman’s pronouncements.
“I’ve gone through cycles like this in the past. This is an extreme and more, but that too will pass,” the hedge fund major said Thursday. “At the end of the day, the stock market reflects economic progress or lack thereof.” He added, “The water is seeking its level.”