Zoom Bans Speech, Stock Price Hits New High? Hedge Fund Tycoon: Robinhood Retail Investors Will End in Tragedy

Since the stock market crash in March, the US stock market has been on a continuous rise, despite significant disparities with various economic indicators. Even Ethereum co-founder Vitalik believes that the stock market is too crazy. American billionaire and hedge fund giant Leon Cooperman also pointed out that these retail investors who are eager to chase after gains will ultimately end up in tears.

Leon Cooperman expressed his pessimism about the market yesterday (16th) in an interview with CNBC, criticizing investors on the trading platform Robinhood, where the user base has significantly grown recently. He claimed that these retail investors will end up in tragedy. He stated:

The casino is closed, and the Fed promises to provide free money for the next two years, so let them continue to speculate. They are doing stupid things, and in my experience, these retail investors in the secondary market (Robinhood) will end up in tears.

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According to a Goldman Sachs research report, so far, these retail investors have outperformed professional investors like Cooperman and hedge fund institutions. Cooperman also pointed out the phenomenon of excessive speculation, such as the stocks of several bankrupt US companies surging by nearly 100%.

Hertz Files for Bankruptcy, Stock Price Soars

Cooperman uses the example of American car rental service Hertz to illustrate that after filing for bankruptcy protection, its stock price surged from $0.56 on the day of the bankruptcy announcement on May 22 to $5.5 on June 8, nearly a tenfold increase. Additionally, companies like the retail chain J.C. Penney and oil company Whiting Petroleum also experienced a surge in their stock prices after filing for bankruptcy (as of the deadline, Hertz stock price had fallen to $1.88).

Moreover, even Zoom, which has been embroiled in controversies since the outbreak of the pandemic, saw its stock rise amidst this almost frenzied speculative wave.

Admits to Blocking Specific Meetings at the Request of the Chinese Government

Zoom first faced security concerns earlier this year and stirred up controversy again at the beginning of this month when it announced that it would not provide end-to-end encryption for free users. According to a report by TechCrunch, Zoom recently admitted to "Voice of America" that it blocked accounts and meetings related to the commemoration of the Tiananmen Square incident at the request of China. Zoom's official response was as follows:

"We received requests from the Chinese government, and like any global company, 'we must comply with the laws of the countries in which we operate'."

Despite the continuous negative news, Zoom's stock price continues to hit historic highs this year.

After the market was impacted by the pandemic, investors seem to view the market crash as a rare opportunity once in a decade, creating a market atmosphere that is crazy and full of speculation. It's no wonder that Ethereum founder Vitalik expressed his feelings in a tweet: "What we expected: cryptocurrencies to become more normal and more like the stock market; What actually happened: the outside world has gone crazy, and the stock market has become more like cryptocurrencies."