During the recent GameStop stock frenzy, a voice of reason seems to have come from none other than hip-hop veteran Ja Rule.
When the GameStop stock experienced a short squeeze and trading was restricted by trading app Robinhood and other brokers, Ja Rule was one of the first to speak out about what he thought was the unfairness of it all.
Jar Rule, who recently completed the Harvard Business School Online certificate program, tweeted his outrage about the trading restrictions.
“Yo this is a f–king CRIME what @RobinhoodApp is doing DO NOT SELL!!! HOLD THE LINE…WTF,” the “Put It on Me” rapper tweeted Jan. 28.
In a separate tweet he continued: “They hedge fund guy shorted these stocks now we can’t buy them ppl start selling out of fear… we lose money they make money on the short… THIS IS A F–KING CRIME!!!”
He then blasted Wall Street for derailing “the American dream.”
Shares of GameStop, silver and other companies have seen a dramatic increase after receiving hype online from forums such as Reddit’s r/WallStreetBets. “Retail investors began to plow into those heavily shorted names and pushed the stock higher. That set off what’s known as a short squeeze,” CNBC reported.
Hedge funds and other investors who had shorted those stocks then scrambled to decrease their losses by purchasing shares at the higher price. GameStop shares traded as high as $483 on Jan. 28 but went below $90 on Feb. 3.
Ja Rule was out front on Twitter calling “hold the line!” as the GameStop price plummeted. “His thinking – call it Ruleonomics – is sound: that if all of the Reddit raiders who united to buy up the ailing company’s shares en masse simply held onto them, then the price would remain stable,” NME reported.
Moguldom Nation founder Jamarlin Martin retweeted Ja Rule’s “hold the line” advice, tweeting, “You’re going to be holding the line alright, the authorities are about to PULL THE RUG.”
Ja Rule, who has invested through Robinhood since 2014, spoke out about the whole Wall Street game during a recent interview with CNBC’s “Squawk Alley.” The Grammy-nominated artist said, “There has been some people that have made money on those stocks, of course, but be very careful.”
When asked about the “Reddit-driven meme stocks,” he admitted he initially liked Robinhood but was frustrated by the trading halt and restrictions by the app.
“I actually, I loved Robinhood,” he said. “I love what they represent, putting basically the stock market in your pocket. Really cool, you know, let’s let retail traders trade really quick in real time and [it] kind of makes you feel like you’re on the floor with the traders. So, really, a cool app. But I was really upset about what they did the other day because it kind of felt like everything they stood for—even their name, Robinhood—it kind of all just went in the dumps [with] what they did the other day by freezing some of the trading on certain stocks.”
Ja Rule complained about game-playing on Wall Street.
“The way the stock was being played with, it felt like if we hold, these guys would have to get on our side of it and buy the stock … so they don’t lose money on the short,” Ja Rule said. “That was my thinking on it — not so much of, ‘hold it forever, and this is going to be a stock that grows in time.’ I wouldn’t advise that.”
He added, “I think the real situation that’s going on, I don’t think the CEO had the money to cover the actual money that was going through the platform … I think that’s really what the freezing was about,” he said. “I don’t know but it just looks like it’s playing into the hands of the big Wall Street guys and the big hedge fund guys.”
According to Ja Rule, the GameStop incident may totally change the stock market game. “I think this is going to drive people more toward decentralized markets,” he told Rolling Stone, predicting “a victory for bitcoin.”
One thing is for sure, GameStop is in trouble. The company’s shares plunged below $100.
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GameStop’s stock price cratered on Feb 2, falling 60 percent to $90 a share. This drop also pointed to a possibility that the popular r/WallStreetBets Reddit stock market discussion board may be losing its magic ability to sway the market.
“These things can last longer than people expect, but when they unwind, they can unwind pretty fast,” Ross Mayfield, investment strategist at Baird, told CBS. “When it’s complete speculation mania and gambling, someone is going to be left holding the bag.”