CNBC/Getty
- Leon Cooperman said the GameStop surge will “end very badly for the public.”
- He also defended short-sellers and Melvin Capital’s Gabe Plotkin.
- And he said anti-elite sentiment was “bullshit” and hit out at people “attacking” the rich.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Billionaire investor and hedge fund manager Leon Cooperman has said he thinks the short-sellers attacking GameStop will have “turned out to be right” and that the saga will “end very badly for the public.”
He also expressed anger about anti-elite sentiment, saying on CNBC on Thursday that the idea that rich people do not pay their fair share is a “bullshit concept” that is “just a way of attacking the wealthy.”
Amateur investors have piled into US video-game store GameStop’s shares, causing them to skyrocket more than 1,700% between the start of the year and Wednesday. Other previously unloved stocks such as cinema chain AMC and Bed Bath & Beyond have also surged.
The meteoric rise has been driven by the Reddit forum Wall Street Bets, whose members have aimed to “squeeze” hedge funds that were shorting – that is, betting against – the stock. After tumbling 44.29% to $193.60 on Thursday, GameStop was up as much as 100% in pre-market.
Many members of the forum see themselves as the "little guy" fighting against the titans of Wall Street, who they said never seem to lose. Redditors have rejoiced in the billions of dollars of losses suffered by hedge funds such as Melvin Capital.
But Cooperman told CNBC on Thursday that things are going to "end very badly for the public."
"The reason the market is doing what it's doing is people are sitting at home, getting their checks from the government, basically trading for no commissions and no interest rates," the Omega Advisors boss said.
"I'm not saying they're stupid," he added. But Cooperman said he thought Melvin Capital boss Gabe Plotkin "will have turned out to be right in his view on GameStop." Melvin has said it closed its short position on Tuesday.
"I've been doing this for 55 years. I can tell you the short-sellers generally speaking are more knowledgeable than the long players," he said.
Cooperman also addressed rising anti-elite sentiment, including possible tax rises for the wealthy under President Joe Biden. "This 'fair share' is a bullshit concept," he said. "It's just a way of attacking wealthy people, and I think it's inappropriate."
Reddit users derided the hedge fund boss's comments. "The big old billionaire is mad that peasants are playing their tricks on them!" one said.