SHARK TANK’s Mark Cuban Says Reddit Crowd Could Have Positive, Lasting Affects on Trading
By Movieguide® Staff
As a group of traders on Reddit enraptured investors after their command of trade markets this week, co-host of the TV show SHARK TANK and billionaire investor Mark Cuban cheered the young investors on in beating hedge funds and brokerages at their own game.
“I got to say I LOVE LOVE what is going on with #wallstreetbets,” Cuban said on Twitter.
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
WallStreetBets is the forum on Reddit responsible for last week’s events. Aside from sharing stock market advice and memes, the group of traders decided to fight back against professional investors who bet against companies like GameStop.
Cuban responded to the Reddit-organized stock price run-up in an interview on CNBC’s SQUAWK BOX.
“How is this any different from what any brokerage firm does?” Cuban questioned. “As someone who’s shorted stocks many times …, you know exactly what you’re getting into, and you know exactly what the risks are.”
Aside from GameStop, retailer investors also boosted prices for shares in AMC and Blackberry, two other companies that Wall Street expected to fail.
“It’s just not the first time that low float or heavily shorted stocks are being targeted,” Cuban said. “It’s just not the normal suspects doing the targeting. That’s why I like it.”
The Dallas Mavericks owner added: “The reality is you just have to run your company and do your best. It doesn’t change the fundamentals of your company at all.”
Cuban also noted that whether share prices go up or down, at the end of the day, a bad company won’t survive.
“If it’s a good company, it’s a good company. If it’s a bad company, it will end up going out of business,” Cuban said. “The people who bought it just to speculate — some will make money, some will lose money. But that’s just the way it’s always worked.”
Aside from the irony of it all, Cuban said that the young investors behind the Reddit-influenced value increase could have a positive and lasting effect on trading.
“Now it’s just a flex; they’ve picked the right place to show off, which is heavily shorted stocks,” Cuban said. “Hopefully, they’ll go to good companies, too, and help them grow, and we’ll see a positive side of this that could have long-lasting effects.”