7 Celebrity Investors Who Spoke Out on the Raging War on Wall Street

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It’s a David and Goliath story of the modern age. A rogue group of individual investors band together in an online community and decide to take down hedge funds that profit from companies failing. The battle is raging around video game seller GameStop (NYSE:GME), which has shown three straight years of declining revenue and earnings per share.

Hedge funds Melvin Capital, Citron Research, and others had bet on the retailer to lose value. But traders in the Reddit community r/WallStreetBets had other plans. They intentionally unleashed a barrage of trading activity to drive an inexplicable rise in the price of GME stock, forcing both funds to incur huge losses and close out their short positions

Image source: Getty Images.

As if that weren’t enough drama, this story also has a number of celebrity appearances — as well-known investors and personalities have taken to Twitter to add their own color commentary. Here’s what seven of them have to say.  

Mark Cuban

High-frequency trading (HFT) uses complex algorithms to analyze data and fulfill trade orders very quickly. It’s controversial because HFT traders use the speed of rules-based decision-making to turn profits, often at the expense of individual investors who are slower to process information and execute trades.

As Cuban touches on, HFT gives institutional traders a clear advantage over the little guy. And that’s exactly what motivated the WallStreetBets community to push back against a system that feels rigged against them.

Elon Musk

Musk is not a fan short-sellers, obviously. But there is history here. His own company Tesla has had its share of run-ins with short sellers — prompting Musk to float the idea of taking Tesla private in 2018.

Morgan Housel

As WallStreetBets has shown us, despite the technology that powers the financial markets, investing is still a very human activity.  

Tyler Winklevoss

Winklevoss is referring to Robinhood’s decision to halt purchases of GME stock temporarily, while still allowing for liquidations. Incidentally, Melvin Capital is owned by Citadel, LLC, a company that’s responsible for 40% of Robinhood’s revenue. It would seem that Robinhood may not be the trading platform for the people after all. 

Chamath Palihapitiya

Palihapitiya also calls out Robinhood for failing to live into its own mission when it had the chance. 

Kevin O’Leary

Even Mr. Wonderful is a proponent of having checks and balances in place to prevent market manipulation. Even better if those checks and balances are driven by an angry crowd of everyday investors.

Pat McAfee  

McAfee is known for his professional sports and commentating career rather than his investing prowess, but he does ask an important question. Now that the little guys have shaken up the institution of Wall Street, where do we go from here?

Legislators Elizabeth Warren and Paul Gosar are asking for investigations into Robinhood’s actions and users are already filing class action lawsuits against the trading app. But short-selling, HFT, and WallStreetBets will continue on. The band of rogue traders has actually already moved on to its next targets, namely AMC, Nokia, and Blackberry.

 

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