Billionaire Mark Cuban says his 11-year-old son made money with Wall Street Bets traders and he 'loves' what's going on with the Reddit forum
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- Mark Cuban says his 11-year-old son made money trading with the Wall Street Bets forum.
- The subreddit went private for an hour Wednesday after a deluge of new participants joined.
- The SEC says it is monitoring market volatility amid surges in GameStop and other stocks.
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The entrepreneur Mark Cuban said Wednesday that his 11-year-old son made money by trading with r/wallstreetbets and that he loved how the Reddit day-trading forum became the central catalyst to an epic short squeeze.
"I got to say I LOVE LOVE what is going on with #wallstreebets," Cuban said in a tweet. "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 members of the stock-investing chat group, who numbered about 3.5 million by Thursday, urged one another to keep pushing the prices of certain stocks higher with the partial aim of squeezing short-sellers, or those betting on the prices to fall.
That led to an explosion in prices of highly shorted stocks. GameStop, AMC, Pearson, BlackBerry, and Nokia were among Wall Street Bets' first few targets. The forum even went private for an hour Wednesday after a flood of new users raised concerns about its ability to police content.
Cuban's tweet gathered some criticism from followers for not addressing the regulatory questions prompted by the current market dynamic, while others encouraged him to teach his kid to become a responsible investor.
But piling into previously unloved stocks is unlikely to turn out to be a good thing for most retail investors, a CEO of one of the largest independent financial advisory firms warned.
"The valuations can be expected to be extremely wild - in both directions - and there's a legitimate risk that investors could get burned," said Nigel Green, the CEO of deVere Group, adding he would avoid being drawn into the hysteria of social-media-led stock frenzies.
"Micro-bubble spotting, and diversification across asset class, sector, region and even currency, should become a priority for investors right now," he said.
The US Securities and Exchange Commission on Wednesday said it was actively monitoring market activity given the surge in shares of GameStop and other companies over the past week, indicating how the frenzy grabbed the attention of Wall Street and Washington.
"There is a sense that professional investors are unhappy another group has come along and forcibly joined in with a game they see as theirs and theirs alone, none too pleased that certain elements of the whole enterprise have been shown up as farcical," said Connor Campbell, a financial analyst at SpreadEx.
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