MSNBC’s Stephanie Ruhle and CNBC’s Andrew Ross Sorkin Sound Dire Warning on GameStop Surge: ‘The Big Guy Gets Bailed out Before the Little Guy Does’
MSNBC’s Stephanie Ruhle and CNBC’s Andrew Ross Sorkin sounded a dire warning regarding the sudden and shocking surge in the price of GameStop’s stock, noting the “little guy” rarely ends up on top.
“What I’m concerned about is that this is a pump and dump scheme that effectively is being cloaked as, ‘Mother Teresa’ has arrived on the scene,” Sorkin said of the boom. “I think there are real underlying issues with the system that need to be resolved, I do not want to protect the system. I love watching the little guy beat the big guy as much as anybody, but what I wonder is whether these folks, quote — unquote, trying to stick it to the man, are ultimately going to be sticking it to themselves, in truth.”
Sorkin went on explain that the hedge fund manager that lost money due to the boom will ultimately be fine, yet others who may lose money will end up struggling to pay rent.
“At the moment David is beating Goliath. They’re winning, but look at history, right, look at the ’08 subprime housing crisis,” Ruhle added. “Their People have applied for loans they shouldn’t have and they lost their houses, they lost everything. And those shady bankers and those mortgage brokers, maybe they lost their jobs but they were a-okay, but those who lost their homes, they still lost their homes. That could happen again. The big guy gets bailed out before the little guy does.”
Galaxy Digital CEO Mike Novogratz, a guest of Ruhle’s show, also revealed that when he had advised a friend to sell their AMC stock, it was already $5 lower than when he bought it that same day.
“You’re turning over to new people thinking, ‘Hey, I’ve got to get in on this thing,’ and it’s really dangerous. I had a friend call me, and he said I just bought AMC, which is another stock like GameStop, and I’m like, hang up the phone and sell it immediately, and it’s already $5 lower than it was,” he said, predicting lawsuits in the future.
Despite her warnings, Ruhle did label GameStop’s stock boom as “beautiful,” noting that people interested in investing should not have to have a background in the field.
“There are lots of people that have disposable income, that if they want to play in the markets should be welcome to and shouldn’t have to pay up to be a client of some fancy firm or research organization,” she added, prompting Sorkin to agree that the market should not only be accessible to professionals.
“No one’s protecting the hedge fund guys,” Ruhle continued. “What we’re saying is, before you dance on their graves, better check their pulse and look for the exit door because there’s a good chance they’re not dead and they’re coming for you, and we know this.”
GameStop’s stock has been on a wild ride Thursday, as it has been all week. Shares reached a high of roughly 470 at approximately 10 a.m., then nosedived to 126. As of this article’s publication, the stock is at 290 — down almost 20 percent from its opening price.
Watch above, via MSNBC.
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