Billionaire tech entrepreneur and Dallas Mavericks owner Mark Cuban spent time answering questions from Reddit traders particularly members of the WallStreetBets forum as the stock price of GameStop (NYSE: GME) plunged 60% on Monday.
GameStop shares closed $90 each, down from its $325 price on Friday. The stock price of the video games retailer climbed to an all-time high of $483 per share last week. Its parabolic rise was driven by members of the WallStreetBets. As a result, short-sellers lost nearly $20 billion last month.
During an “Ask Me Anything” Q&A session on WallStreetBets forum on Reddit on Tuesday, Cuban told traders that he does not own any shares of GameStop. However, he advised them to hold their stock holding in the company even if it is falling.
Cuban wrote, “If you can afford to hold the stock, you hold. I don’t own it, but that’s what I would do.”
He explained that GameStop’s stock price is currently affected by supply and demand.” He noted that Robinhood “crippled the source of demand,” which resulted to a decline in the GME’s stock price. Sellers keep lowering their price on GME stock because they cannot find buyers on Robinhood.
Mark Cuban believes Reddit traders will continue disrupting WallStreet
“Keep the most natural buyers out of the market and the price keeps on FALLING. Then that drop accelerates because the more the stock falls the more owners who bought on margin get margin calls. When that margin call happens, its brutal. They just take your stock, send you a fuck you note and sell your stock at the market price, no matter how low. They just want to get your cash to pay back the loan. That then accelerates the selling. Which then leads to what we are seeing in the market right now with GME in particular,” explained Cuban.
Furthermore, the billionaire tech entrepreneur thanked the WallStreetBets members for “changing the game” on WallStreet. He added that Robinhood and the other zero commission brokers” messed up the change because they “didn’t have enough capital to fund the fight.”