GameStop, AMC shares jumping from Reddit; Mets owner Steven Cohen's connection

Yahoo Finance's Dan Roberts joins with the latest on the big trading in AMC and GameStop shares, powered by WSB on Reddit, and Mets owner Steven Cohen's connection.

Video Transcript

ADAM SHAPIRO: Someone is smoking something that's legal in only 16 states. Take a look at this. AMC, that stock up 300% today. Now, maybe it's the fundamentals. Maybe it's something else. Dan Roberts, what's going on here?

DAN ROBERTS: Well, look, Adam, we've been talking about it all day, right? I mean, in many ways, you have to credit the Redditors. This is Wall Street's bets that have really pumped a lot of these stocks that had been ailing amid the pandemic. AMC is a fine example. You know, we've talked so much about how AMC stock has just barely weathered the storm of theaters being closed.

But really, the name that started all this last Friday was GameStop. And of course, those aren't the only ones. There's been BlackBerry. Build-A-Bear rose today. A lot of people were calling this the mall stocks bump.

And look, it's-- it's people on the internet. It's retail investors that jump on social media and gang up and say, let's stick it to the shorts. That's how it started with GameStop. We all know what happened after Citron Research, Andrew Left, came out and said that GameStop was going to sink to $20.

And then an Elon Musk tweet yesterday did not hurt either, and, I think, arguably, added to it. I mean, we're-- we're kind of in a meme market. Elon Musk came out and tweeted "Gamestonk," and those Redditors bought even more. Of course, GameStop up huge in the last few days.

And interestingly, there's a Mets connection here. You know, this morning, you saw a lot of Mets fans, Adam, concerned that there would be a hit to Mets payroll because of all this. Now, that is because Stephen A. Cohen, with his hedge fund Point72, has invested nearly $2 billion in Melvin Capital, the hedge fund of a former protege of his. And Melvin is one of the biggest shorts on GameStop.

So stick with me here. Melvin having a very bad January already, because it has placed a number of short bets on names that have surged and gone up big, GameStop being one of them. Now, of course, Steven A. Cohen himself got on Twitter and replied to one of these folks and said, why would one have anything to do with the other? And just as a reminder, Steven Cohen worth $14 and 1/2 billion, Adam. So the short answer, at least from the man himself, is that his tenuous association here with the GameStop short squeeze will not have any impact on Mets payroll.

SEANA SMITH: Well, and Dan, that also kind of highlights the bigger picture when we talk about this, because we have hedge funds here. Yes, they're getting hurt at this point. But on the other end of it, you have so many of these retail investors-- and we've been talking about this over the last 10 months-- getting in.

They get-- they see something. There's so much hype around it. They put money towards it. In a day, a couple of days, a couple of weeks, I mean, we don't know when this thing collapses, they, of course, might be in a position where they're losing money that they can't afford to lose right now.

DAN ROBERTS: Unless they get out sooner, right, Seana? I mean, this is when it starts to feel like a casino. And you know, you also saw a lot of people-- I know you guys know that I follow cryptocurrency closely, a lot of people saying, well, wait a minute. This is manipulation.

But what about when the government does it and prints money, because that's what all the crypto people say is that the value of Bitcoin is that you're not going to see printing of money like the government can do, handing out stimulus checks. It's all connected here. I mean, we've been talking about the power of the retail investor, the social media young investor on Robinhood all pandemic, right?

And there-- you know, there was a separate but related narrative about with-- with sports not running, when-- when live sports were paused, were all the sports fans switching over to stocks instead of sports betting? And this is just the latest development here is the people on Wall Street bets fueled by memes, fueled by groupthink, and really, honestly, the fun of being in this game on the internet today. But again, as you mentioned--

ADAM SHAPIRO: Well, it's fun to put the squeeze on some of these shorts,too.

DAN ROBERTS: --it can get very dangerous. You can lose your shirt.

ADAM SHAPIRO: I mean, there's schadenfreude here, right? I mean, some people are secretly cheering what's happening to some of these shorts.

DAN ROBERTS: Absolutely. Stick it to the shorts. And you know that Elon Musk loves it. No one loves to stick it to the shorts more than the Tesla CEO.

ADAM SHAPIRO: Why I wear long pants. Thank you very much.