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Leon Cooperman told CNBC on Thursday he believes the Reddit-fueled trading frenzy involving GameStop shares will end poorly. However, the billionaire investor said he wasn’t faulting the people who kicked off the epic short squeeze, which sent the stock to dizzying heights in recent days.
“I’m not damning them. I’m just saying from my experience, this will end in tears,” Cooperman said on “Fast Money: Halftime Report,” as shares of the beleaguered video game retailer tumbled about 25%. Earlier in the session, GameStop’s stock touched an all-time high of $483 but came under pressure as numerous retail brokerages placed 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” do.
Just last week, Cooperman had warned about “euphoria” in parts of the stock market. GameStop shares were trading under $50 on the day of Cooperman’s remarks.
“I’ve been through cycles like this in the past. This is extreme, more so, but this too shall pass,” the hedge fund pioneer said Thursday. “At the end of the day, the stock market reflects economic progress or the lack thereof.” He added, “Water seeks its own level.”
