To defy Wall Street hedge funds and the stocks they bet against, a group of retail investors on Reddit forum r/WallStreetBets rallied together to help drive the stock price of GameStop, AMC Entertainmentand BlackBerry, to name a few.
Many traditional investors are concerned by the speculative trading, but billionaire Mark Cuban is not one of them.
In fact, his 11-year-old son, Jake, “made trades” in AMC and BlackBerry with the Reddit group, Cuban tells CNBC Make It. “He got all his info from TikTok.”
Cuban tweeted on Wednesday that his son made money from the trades, but on Thursday, Cuban clarifies to CNBC Make It that Jake “hasn’t made money yet.”
“I got to say I LOVE LOVE what is going on with #WallStreetBets,” Cuban tweeted. “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.”
Although he is cheering on the Reddit traders, Cuban admits that “some will lose money, but that’s just the way the market has always worked,” he said on CNBC’s “Squawk Box” on Thursday. “It’s not the first time low float or heavily shorted stocks have been targeted.”
“There are many hedge funds that have made a lot of money over the years targeting heavily shorted stocks,” he said. “I don’t think this is anything different. It’s just the people who are making the push aren’t who we expect them to be and so that’s why I like it.”
However, some regulators are worried about the GameStop trading frenzy, and retail brokerages, like Robinhood and Interactive Brokers, restricted trading for stocks like GameStop, AMC and Blackberry, to name a few, on Thursday.
But, according to Cuban, “when you bring people out of nowhere to really show the inefficiencies of the market, it’s a good thing.”
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”