A deceptively edited clip of New York hedge fund billionaire Leon Cooperman railing against the term “fair shair” went viral Thursday, leading many to accuse Cooperman of attacking the retail investors of the Reddit discussion board WallStreetBets.
Cooperman was interviewed on CNBC and spoke about the WallStreetBets day traders who drove up the price of GameStock’s stock to squeeze Wall Street hedge funds who wanted to short GameStop. In an edited clip of the interview shared on Twitter by Disclose.tv, Cooperman appears to belittle the WallStreetBets investors as people who are “sitting at home getting their checks from the government.”
Disclose.tv’s tweet frames the clip as “billionaire Leon Cooperman fumes at retail traders and shouts: ‘It’s a way of attacking wealthy people.'”
This clip, however, is edited to cut out several of Cooperman’s statements that provide needed context for the points he makes.
Cooperman told CNBC that he believes the meteoric rise of GameStop’s stock will end poorly for many of the retail traders who are climbing aboard the bandwagon while the stock price is artificially high, but he does not find fault with the initial Reddit investors who decided to put the squeeze on the hedge funds and make some money. Cooperman believes that several factors have contributed to what the market is experiencing, including near-zero interest rates imposed by the Federal Reserve and the stimulus checks sent to most Americans by Congress.
“It’s all interconnected,” he explained. “The reason the market is doing what it’s doing is, people are sitting at home, getting their checks from the government, basically trading for no commissions and no interest rates. I’m not saying they’re stupid. Show me a guy with a good record consistently, and I’ll show you a smart guy.”
“I’m not damning them. I’m just saying from my experience, this will end in tears,” he added.
He went on to explain that based on what he’s seen, GameStop is not worth the extraordinary price the stock is trading at. As of Friday afternoon, the stock was trading at about $330.
“GameStop is not worth $500, not worth $400, not worth $300, not worth $200, not even worth $100, not even worth $50,” Cooperman explained. “I don’t know what the hell it’s worth to be honest with you, I’m not involved with it.”
Later in the interview with CNBC, Cooperman expressed concern that the current conditions of the market are unsustainable in the long term. He said that the Federal Reserve’s monetary policy is incentivizing investors to make higher risk bets with their money in search of better returns. As people move money out of traditionally safe places like savings accounts because interest rates are too low and put them into risky stocks to make more with their money, the stock market keeps rising and reinforces those investment patterns.
But someday interest rates will have to go up. And Cooperman predicted that taxes will have to be raised so that the federal government will be able to continue making payments on the national debt.
“Everybody is moving out on the risk curve, and one of these days — not today, not tomorrow — but one of these days people are going to come in on the risk curve, and I think we’ll have lots of issues to deal with,” Cooperman said.
It was at this point when Cooperman criticized rhetoric from Democrats about how the wealthy need to pay their “fair share” in taxes, even though he voted for President Joe Biden.
“I hate that expression with a passion,” Cooperman said. He questioned how Democrats define “fair share.”
“I’m willing to work six months a year for the government and six months for myself, which means a marginal tax rate of 50%,” he said. “This fair share is a bulls**t concept. It’s just a way of attacking wealthy people, and I think it’s inappropriate.
“We’ve all got to work together and pull together.”
So, his comments about “It’s just a way of attacking wealthy people, and I think it’s inappropriate,” in context, were clearly not about the people who are trading on GameStop, but rather about the tax plans being put forth by Democrats. He clearly did not trash people for using stimulus checks to play the stock market or say that what they were doing was just trying to get back at rich people, as many have interpreted the deceptively edited clip.