“The Big Short” legend Michael Burry has been summoned by the SEC for his involvement in the GameStop saga

One of the biggest players in the GameStop saga is asked by the US Securities and Exchange Commission to participate in an investigation.

Michael Burry – Founder of Scion Asset Management

Michael Burry, noted investor and founder of the private investment firm Scion Asset Management, recently tweets that the company has received a subpoena from the United States Securities and Exchange Commission (SEC). A scan of the letter reveals the incident involving GameStop Corp. and was on 21.09. However, that tweet was later deleted.

Burry owned more than 5% of GameStop shares last year before selling 1.7 million shares for $ 10-20 in the fourth quarter of 2020. In January 2021, GME shares traded for over $ 400 and are currently selling for $ 185 on the New York Stock Exchange.

The GME price soared thanks to an army of amateur day traders and some anonymous Wall Street veterans. They flock to online forums like WallStreetBets to coordinate stock picking. GME was the first stock of meme, an asset with no intrinsic value traded as a characteristic of culture. Other declining companies, like the 2000s cinema service AMC and BlackBerry, also found fresh money in meme stocks that year.

Meme stocks are close relatives of meme tokens, cryptocurrencies that have no use but trade wildly and sometimes become big coins if holders can convince others to join.

Introduced as a hoax nearly a decade ago, Dogecoin (DOGE) is the standout meme coin with a market cap of nearly $ 28 billion at press time. Another example is the Shiba Inu (SHIB), which was launched recently and is also borrowing from DOGE’s dog logo idea, which has a market capitalization of $ 3.7 billion. SHIB was recently traded on Coinbase. Coinbase is reportedly competing with the Robinhood mobile trading app – where many GameStop and Dogecoin speculators are trading in early 2021.

Robinhood’s involvement in GameStop’s “revolt” is controversial. At some point when the price of GME went up, Robinhood stopped users from buying more GME. Users are upset that they can no longer buy, while politicians from progressives like Alexandria Ocasio-Cortez to conservatives like Ted Cruz have suggested that a hearing be needed to determine whether or not the app picks winners and losers. Even others in government fear that GameStop’s rise is a sign of market manipulation, as everyday investors may be fooled by a stronger force behind the scenes – like many others.

The SEC, led by Gary Gensler, listened to this request and wants to know what Michael Burry saw and the opinions of others who Burry did not provide.

He wasn’t amused by what happened to GameStop and tweeted in January:

“When the SEC puts GameStop in the spotlight and does well, I’m really happy. What is happening now, however, will have to bear the legal and regulatory consequences. It’s very unnatural, crazy and dangerous. “

Michael Burry was described in the book and movie “The Big Short” for his centuries-old shorts – betting on subprime mortgages that eventually caused the 2008 financial crisis that collapsed some colleagues. In June, he said that the “mother of all problems” is coming to the crypto market, as reported by Bitcoin Magazine.

Because of this, Burry’s latest short was made on Bitcoin, or rather, one of the most Bitcoin-friendly investments. Last month, he bought more than 235,000 shares (then valued at $ 31 million) in Cathie Woods’ exchange-traded fund (ETF) ARK Invest Disrupt Innovation.

In addition, ARKK also includes stocks in Tesla (10%), Coinbase (5%), Square (4%), as well as other companies with investments in Bitcoin. Scion holds a put contract on the stock, which gives them the right to sell at a set price. If the ARKK fund drops to the set price, Scion makes money. Hedging is healthy business for Burry, and his fund has a portfolio valued at over $ 2 billion.

For his part, Burry appears to have changed after asking the SEC to step in, tweeted, “This is what is happening in the world …”

Finally, ask a crypto company founder and he will tell you, it’s hard to make money when you are up against the SEC.

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