WallStreetBets, the famed Reddit board that drove up GameStop’s stock as a hit against Wall Street hedge fund managers engaged in short selling, has itself not one, but two big-name billionaire allies. After Tesla founder Elon Musk championed the cause on Twitter, billionaire Mark Cuban celebrated the movement while accusing its detractors of hypocrisy.
In a tweet on Thursday, the “Shark Tank” star cheered WallStreetBets for “giving the little guy an edge.”
“I got to say I LOVE LOVE what is going on with #wallstreetbets. All of those years of High Frequency Traders front running retail traders, now speed and density of information and retail trading is giving the little guy an edge. Even my 11 yr old traded w them and made $,” he tweeted.
I got to say I LOVE LOVE what is going on with #wallstreetbets. All of those years of High Frequency Traders front running retail traders,now speed and density of information and retail trading is giving the little guy an edge. Even my 11 yr old traded w them and made $
— Mark Cuban (@mcuban) January 28, 2021
Appearing on CNBC’s “Squawk Box” on Thursday, Cuban argued that WallStreetBets engaged in the same kind of behavior as any brokerage firm.
“How is this any different than what every brokerage firm does?” Cuban asked.
“As someone who’s shorted stocks many times … you know exactly what you’re getting into, and you know exactly what the risks are,” he later added.
Cuban also argued that hedge fund managers were upset that “normal suspects” were not the ones targetting the shorted stocks.
“It’s not the first time that low float or heavily shorted stocks have been targeted,” he later added. “It’s just very visible, and it’s just not the normal suspects that are doing the targeting. … That’s why I like it.”
Going forward, Cuban hoped that these types of grassroots investing movements will target good companies or smaller fledgling companies with good mission statements to “help them grow.”
People on social media, however, expressed dismay over Cuban’s enthusiasm, fearing that these types of investing movements could create market instability.
“It’s entertaining, but not good. Market stability is critical to public trust. Pensions, 401’s, and common investors might not be hurt by it today because they aren’t in shorts, but this kind of market manipulation undermines confidence. If you mean we need better regs – I agree,” said one Cuban follower.
“Dear Mark, pls see Rule 10(b) of the SEC act of 1934… we all root for the little guy, but coordinating essentially DDOS attacks to gamma squeeze short sellers is not legal… even if we do love the outcome…” responded another.
“I can’t believe you’re saying this. I think the market needs a better guidebook for trading & shorting, but not this way. Being entertaining is great but do you really believe this will benefit retail investors at the end?! Question your intelligence now!!!!” responded another.
Needless to say, the GameStop surge has created an opportunity for some strange bedfellows, where conservatives, populists, socialists, Trump supporters, and anti-Trumpers have formed an unusual coalition wherein they seem to agree that Wall Street had it coming. Shortly after the stock trading app Robinhood halted all trades on the GameStop (GME) stock, Rep. Alexandria Ocasio-Cortez (D-NY), Sen. Ted Cruz (R-TX), and Donald Trump Jr. were all in agreement that something criminal may have taken place.