Business & Investment

GameStop: Howard Marks calls the GameStop episode “mob behavior” and does not see systemic risk

Mumbai: Howard Marks, One of the most prominent faces in the world financial markets, on Saturday, GameStop He said an episode of the US equity market as a representative of the “excess” of the market would not lead to systemic risk.

Marks said at the 11th Indian Investment Conference of the CFA Society India and the CFA Institute, the tremendous rise seen in GameStop’s stock due to enthusiastic individual investor-led purchases was “separated from fundamentals.” Stated.

“Investments shouldn’t be sports or games. People today are trading for fun … they’re enjoying trying to run out of stocks (like GameStop),” Marks said. Told.

GameStop shares have become the hottest topic in the global financial markets after some retailers, part of the Reddit group called “Wall Street Bets,” have organized co-purchases that have caused large-scale short-term squeeze. ..

Stocks of video game retailers, which were scheduled to go bankrupt due to unfavorable business conditions, rose more than 900 percent in January alone due to short pressures.

GameStop shares have become a symbol of the bizarre battle between retail investors and Wall Street tycoons such as hedge funds. The short pressure caused by individual investor-led buying has resulted in billions of US dollar losses for hedge funds holding short equity positions.

One such hedge fund, called Melvin Capital, was unable to cover the loss with GameStop’s bets, causing a rare event in which individual investors hunted down, resulting in a cash injection of nearly $ 3 billion for Citadel and Point72. A large institutional investor who had to be bailed out by.

Marks, co-chairman and co-founder of Oaktree Capital Management, GameStop Share And some other stocks that saw enthusiastic rallies similar to “mob behavior”.

“Individual investors do not have the funds and power to influence the wider market. Do not consider this a systemic risk,” he said.



GameStop: Howard Marks calls the GameStop episode “mob behavior” and does not see systemic risk

https://economictimes.indiatimes.com/markets/stocks/news/howard-marks-calls-gamestop-episode-mob-behaviour-sees-no-systemic-risk/articleshow/80610855.cms GameStop: Howard Marks calls the GameStop episode “mob behavior” and does not see systemic risk

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