Gamestop and AMC trades restricted: 'How free exactly is the market?' asks WallStreetBets founder

welcome into yahoo finance live i'm zach guzman alongside akiko fujita kicking off with big breaking news we're seeing play out in today's session as many brokers including robin hood moved to restrict trading on some of the names we've seen retail investors piling into the likes of gamestop and amc that news seeming to go the broader market into commerce territory today after we saw that big sell-off yesterday the dow losing about two percent in yesterday's session but today the dow up by about that same margin of course we we did get some big earnings results coming in from facebook and apple and tesla perhaps playing their part as well but we really can't overstate the moves that we've seen play out in some of those retail favorites as i said gamestop down about 30 in today's session after we saw restrictions placed on that trading amc shares also down heavily in today's session as trading on amc shares were restricted as well it's it's sparking a lot of chatter right now about how free the quote-unquote free market may be here as we are seeing trading activity from a lot of retail investors restricted let's kick off the show there with the chat uh with the man behind the reddit group that sparked a lot of this interest not just in game stock but a lot of a lot of these retail favorites here the man behind that reddit wall street bets group joins us now jamie rogozinski the wall street vets founder that joins us jamie thanks for for hopping on to chat here today obviously there's a lot to get into but i guess we'll just start with what do you make of the way that we are now seeing a lot of exchanges restricting some of the trades that you guys in your reddit group talked about yeah you know this is still developing news and i've barely had a chance to really catch up to it but it certainly does bring up that very question that you brought up which is how free exactly is the market why are the brokers uh taking action what are the forces behind there obviously they're pressured under it doesn't make sense uh for robin hood to do something like that given their target demographic uh makes sense for some of the other brokers but you know the first question i have is why did they do that where did that pressure come from uh and and those people are effectively now controlling the price of the market as well so how free is it that's an absolute question jamie you indicated in an interview that you gave to another outlet about that this has kind of grown well beyond what you initially anticipated and i'm wondering when you initially set up this feed what was the motivation you know when i first started the the forum uh back in 2012 i was really looking for a place for people that wanted to take high risk high return trades uh you know in a way that they could learn about that they were unapologetic about the fact that they were taking risk um and and really it was just you know hoping to talk about a different use for the stock market certainly didn't expect for it to balloon the way that it did yeah kiko and i were talking about it yesterday i mean you look at some of the the thesis uh the the fundamental analysis that was going on there particularly among one of your users uh talking about the gamestop short squeeze uh and seeing this now play out it seems odd uh did you expect maybe as much of backlash to what we're seeing now with exchanges talking about needing to protect users from some of the trades that that seem to have a lot of fundamental analysis behind it uh you know we've had this kind of thing happen before it's not the first time about a year ago the exact same thing happened obviously on a much smaller scale didn't get this type of attention so uh it's not necessarily new you know but i do start questioning this i understand the role of the regulators trying to protect the investors and certainly they do need uh protection that's what they're there for but i think the majority of the people that we're talking about that are involved in these types of trades using the word investor doesn't doesn't have any any place in this conversation they're making these bets and they're betting that this thing is going to go up they're not buying the shares a lot of these moves are caused because of the stock options that they're buying which by definition is a very short term uh play and as soon as this bubble bursts as people are calling it uh i have zero doubt they're gonna switch their bets to making the the stock you know they're gonna be betting that the stock price is gonna go down and they'll most likely make money in that direction as well you know uh it's it's as far as protecting those individuals um i don't know that they need protection i think they know full well that what they're doing is gambling and uh and they're perfectly fine with losing whatever money they're placing into these pets so you don't think the sec should be stepping in at all no no not that's not what i said uh the sec definitely has a role for protecting investors i'm just saying that the people that are doing a lot of the people behind this particular move they're driving this price up are not investors scc definitely has a role in the place i don't envy their their position because their job is to make sure that things are functioning properly what we're seeing today is anything but uh so and i do believe that they have a responsibility to do something about the thing that i question is whether they have the tools to do it both either regulatory you know as far as what current rules are established and or the resources we're talking about a huge number of people and and depending on how they decide to go about trying to stabilize this the fact that they're having brokers step in says volumes to me as opposed to the sec so so if we're talking about sec regulation where do you think the responsibility lies should the regulation be about protecting the individual investors should it be about increased disclosure on the hedge fund side i mean if there if the sec director was listening what specifically would you say i mean first of all i'm not an expert or a lawyer or any of these things so uh so my comments is just an opinion but once again there's this new paradigm that people need to realize this term investor is is got a place but but not not in this conversation what these people are doing is is not investing they're using uh the stock market like a casino in a very unapologetic and transparent way they're they're they're not posting information about the fundamentals they're posting funny videos on tick tock uh and and they're encouraging other people to to go ahead and risk the same um it's they're not investors and they're going into this for well knowing that they're probably going to lose their money and the you know the people that are doing this are okay with this that's not to say that there aren't people that are getting hurt by it you know it's impossible to tell but it's hard to imagine that some people aren't reading these uh headlines and are deciding to jump on the bandwagon without understanding what they're doing uh and and they end up holding it back so yeah the sec has to take an approach i can't they have an impossible task on my hand so i do wish them luck yeah and and we know that there are some things in place you think about how much trading has been halted on this just because of those circuit breakers that are in place to kind of break some of the volatility those are there we're seeing exchanges take action here as well it's interesting to hear you talk about the bets of course that's the name of the reddit group here wall street bats not necessarily wall street investment theses but when you think about um you know where this goes akiko and i have been debating for a long time now through all this the end game for the people doing this whether it is to send a message to hedge fund hedge funds or if it's just to really as you said play a speculative investment to make money gamble on this i mean how do you see this ending is it just gonna end with with uh more people getting out taking profits seeing a slow decline what do you think plays out i mean i'll work backwards more people getting out and taking profits people can make profits in both directions as long as these things these prices are moving uh they're agnostic they don't care what direction it is they're not buying the stocks they're not waiting for dividends and they're not using this for their retirement fund um you know as far as uh where this has gone you know it's i i i know this group inside and out they don't have the motivation or the organizational capacity to decide to start a new movement the new occupy wall street movement although there's uh you know obviously parallels being drawn to want to take down the hedge funds they probably my guess is they started with saying let's make some money like they always have and like they always do and they started making money and then this this situation started snowballing where the price of gauge stops starts uh skyrocketing and then the hedge fund you know then we get this public bout between the hedge funds and the uh the investor and all of a sudden it feels good it's like hey look we just knocked over melbourne capital uh you know that's that's a result i don't think they sat there and said hey let's go ahead and knock out a hedgehog today that's that's uh it's not it's not what happened uh but it's certainly what did happen so let's put ideas into their heads so who knows what they do next and jamie we've been showing a number of stocks well you've been talking that have really seen a huge swing as a result of the retail investors gamestop one but also blackberry as well as amc entertainment are you positioned in any of these stocks no no absolutely well first of all you know i i have not been a moderator of wall street vet since april of last year um and if i was i most definitely would not have been involved in any of this i do worry or question what the possible repercussions if any of your current moderators are uh involved because they do have some influences to the conversations that take place um that aside no i'm not i'm not involved with any of these i'm but a passive speculator that is very much enjoying um and appreciating the the magnitude of this yeah it's clearly grown into something a lot larger and i think even people seeing this play out what at the beginning of the week may have thought we'd be here talking about the role of wall street vets here now as we continue to see all these stocks move in various directions but uh jimmy rogozinski wall street bets founder from reddit appreciate you coming on to share your take on how it's evolved thanks again

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Id: mqpunBXe5N8

Length: 10min 4sec (604 seconds)

Published: Thu Jan 28 2021