“I did not condemn them” however it can “finish in tears”.
Leon Cooperman told CNBC on Thursday he believes the Reddit-fueled trading frenzy in GameStop stocks will end badly. However, the billionaire said he hadn’t blamed the people who sparked the epic short squeeze that drove the stock to dizzying heights in recent days.
“I didn’t condemn them. I’m just saying from my experience this will end in tears,” Cooperman said on Fast Money: Halftime Report as the beleaguered video game company’s shares fell 25%. GameStop stock hit an all-time high of $ 483 at the start of the session but came under pressure as numerous retail brokers put limits on trades.
“GameStop is not worth $ 500, not worth $ 400, not worth $ 300, not worth $ 200, not even worth $ 100, not even worth $ 50,” said Cooperman, chairman of the Omega Family Office. He added that “investors” don’t own GameStop – only “speculators”.
Only last week Cooperman had warned of “euphoria” in parts of the stock market. GameStop shares were trading below $ 50 on the day of Cooperman’s remarks.
“I’ve gone through such cycles in the past. It’s more extreme, but that too will pass,” said the pioneer of the hedge fund on Thursday. “Ultimately, the stock market reflects economic progress or lack of it.” He added: “Water seeks its own level.”