(UNLAD) The billionaire CEO of a hedge fund has blasted GameStop traders as ‘speculators’ sitting at home ‘getting their checks from the government’.
In a recent interview, Leon Cooperman, who heads up Omega Advisors, said stimulus checks issued by Congress to support Americans amid the ongoing pandemic were responsible for the surge in GameStop stock.
‘It’s all interconnected. 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. I’m not saying they’re stupid. Show me a guy with a good record consistently, and I’ll show you a smart guy,’ Cooperman said.
The stimulus checks were issued in response to the upwards of 400,000 deaths caused by the pandemic and more than 20 million jobs lost.
The Wall Street chaos has taken the world by storm in recent days, with many dubbing it a ‘David vs Goliath’ fight, in which individual investors have used the tactics of large hedge funds against themselves.
As television host Charles Payne noted earlier this week, ‘The shorts have had their way with the market for decades, and no one has ever complained about it, so I am thrilled, that individual investors are playing the same game, and now [big hedge funds] are losing.’
Speaking to CNBC, Cooperman said he believes the GameStop frenzy will end badly.
‘I’m not damning them. I’m just saying from my experience, this will end in tears,’ he said. On Wednesday, January 27, GameStop was the most traded stock in the US.
‘I’ve been through cycles like this in the past. This is extreme, more so, but this too shall pass. At the end of the day, the stock market reflects economic progress or the lack thereof,’ he said, adding that ‘investors’ don’t own GameStop, ‘speculators’ do.
‘GameStop is not worth $500, not worth $400, not worth $300, not worth $200, not even worth $100, not even worth $50,’ he said.
In the same interview, Cooperman criticised the Biden administration for its intent to increase taxes on the rich so that wealthy Americans would pay their ‘fair share’.
‘I hate that expression with a passion,’ Cooperman said, adding that the phrase is too vague and he doesn’t know what it means. ‘I’m willing to work six months a year for the government and six months for myself, which means a marginal tax rate of 50%’.
He added, ‘This fair share is a bullsh*t concept. It’s just a way of attacking wealthy people, and I think it’s inappropriate. We’ve all got to work together and pull together.’
