Meme stocks: ‘A lot of people will lose a lot of money,’ Interactive Brokers founder says

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Finance

It’s been roughly a year since GameStop (GME) began overtaking headlines and a ‘meme stock’ phenomenon was born. However speculative assets have been under pressure recently amid rising inflation and a more hawkish-toned Federal Reserve.

“I do hope that investors will refocus on fundamental values,” Thomas Peterffy, founder of Interactive Brokers told Yahoo Finance Live.

“This meme stock idea — it’s fun, but it’s not sustainable,” he continued.

“I think a lot of people will lose a lot of money on these meme stocks. It’s not good for the market, and it’s not good for the people,” said Peterffy.

Trading platforms like Interactive Brokers have seen an influx of retail investors during the pandemic as asset prices soared.

Shares of Robinhood (HOOD), seen by some as a proxy for retail investors, are down 21% year-to-date. The stock is trading at around the $15 level roughly six months after reaching an all-time intraday high of $85 per share in August.