After noting that he was rooting for r/WallStreetBets going against short-sellers who were betting on GameStop‘s failure, infamous ex-stockbroker and inspiration for The Wolf of Wall Street, Jordan Belfort, has now offered his thoughts on the recent collaborative stock surge.
Speaking to CNN, Belfort, who has pointed out the subreddit should be putting its efforts towards an undervalued stock rather than bad stocks, warned new small-time investors of the potential risks they are facing. “It’s truly a modified pump and dump because, at the end of the day, it will most certainly go back down because it’s not trading on any rational, fundamental value,” said Belfort. “Just remember, every time the market goes up, GameStop goes up, it’s going to be harder and harder to make that next move up because the market cap is just not sustainable. So, at a certain point, someone has to be crossing out the people who are selling and moving on to the next one.”
Going on to note that it would be very difficult for the law to prove that r/WallStreetBets is doing something illegal. “If you could prove that they are actually colluding together, then that would be illegal…The problem is it is sort of this loose collision where one person says ‘Let’s stick together and stay strong.’ And theoretically, that’s illegal. But I doubt that the [U.S. Securities and Exchange Commission] would try to make a case out of something like that.”
Head over to CNN to catch Jordan Belfort weigh in on r/WallStreetBets’ GameStop stock surge in full.