Mark Cuban is known for speaking his mind and when it came to the GameStop Wall Street Reddit stock scandal, he did just that. In an interview on CNBC, Cuban defended his position that the rules of Wall Street have changed and if the major hedge funds are going to short stocks, they better be prepared to take big losses if the smaller traders find a way to cheat the system.
Cuban even tweeted that he loved what was going on with #Wallstreetbets, and that “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 $.”
The Reddit GameStop scandal comes on the eve when a group of small traders on Reddit banded together to drive up GameStop stock prices in order to make huge profits over the more traditional and richer hedge fund companies that invested in shorting the stock, meaning it would lose its value over time. With GameStop stock rising the hedge funds are now in debt for millions of dollars and the Reddit traders have now reached extremely high profits, some in the millions.
Mark Cuban on Wall Street Bets Scandal
For Mark Cuban it is an example of the loopholes that hedge funds traditionally trade in coming back to haunt them. Cuban requested that the market change its tune and set up rules that allow for more investment in the long term and not profit over dying companies in the short term.
Now, several hedge funds may go broke because they just can't cope with those losses and are rushing the United States Government to call social media trading as inside trading, but once again the view is that it’s the big time Hedge Fund companies trying to save themselves and avoid that smaller traders make any real profit. For Mark Cuban it’s just another example of the elite hedge funds being taken out to dry by their own shady mechanisms.