'We're running out of new money': 'Big Short' investor Michael Burry explains why meme stocks will crash soon as bandwagoners exhaust the trade - Business Insider

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A crash in meme shares is coming, Michael Burry mentioned.
Burry, who's recognized for predicting the US housing-market collapse that precipitated the worldwide monetary disaster, told Barron's in an interview that "we most likely should not have to attend too lengthy" for meme shares to crash as retail merchants and Wall Avenue are totally invested within the theme.
"We're operating out of recent cash obtainable to leap on the bandwagon," Burry advised Barron's. He likened the market froth to the 1999 dot-com and 2007 housing bubble that individuals thought would proceed and mentioned on a regular basis buyers are the almost certainly to be harmed.
The Scion Asset Administration head has made recognized his bearish view on meme shares earlier than. In his brief return to Twitter final month, he mentioned, "All hype/hypothesis is doing is drawing in retail earlier than the mom of all crashes. #FOMO Parabolas don't resolve sideways; When crypto falls from trillions, or meme shares fall from tens of billions, #MainStreet losses will method the dimensions of nations. Historical past ain't modified."

Burry, who was portrayed within the movie "The Massive Quick," was as soon as a GameStop bull, paving the way for the meme-stock frenzy to come. His non-public funding agency purchased a stake within the video-game retailer in 2019 and owned 1.7 million shares as of the top of September 2020.
His thesis started to play out as shares rose via the top of 2020. In accordance with regulatory filings, the agency exited its GameStop stake by the top of the 12 months - lacking out on the inventory's epic rally in January compelled by retail merchants.
Even when the market has a correction, investors told Insider previously that the horde of retail merchants who've joined the inventory market amid the pandemic are largely right here to remain, although meme shares could possibly be hit laborious.

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