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Jordan Belfort, the author of The Wolf of Wall Street who was quite famously portrayed by Leonardo DiCaprio in the classic Scorsese film of the same name, has more to say about the controversy surrounding Robinhood and Reddit-fueled stock surges.
The former broker (and present-day motivational speaker) spoke with Yahoo Finance this week and was asked to share his current insight on the situation. Early into the discussion, Belfort cautioned that those participating should be careful "because when it's over it's gonna be like catching a falling knife."
From there, Belfort spoke on what he calls a "groundswell from the masses" that he predicts will lead to—among other things—a "paradigm shift" in the world of stock trading.
Today's appearance on Yahoo Finance to discuss the GameStop phenomenon.https://t.co/hGJU4ELIZa
— Jordan Belfort (@wolfofwallst) February 2, 2021
As for Robinhood, who at one point restricted transactions for certain securities to position closing only, Belfort said he initially understood that decision but has since changed his mind.
"Originally, I understood it because they do have liability, for sure," Belfort, who believes Robinhood should have instead moved to "raise the margin," said. "But what they did by completely eliminating buying, that was a bit of a red flag to me that there might be some other more nefarious things involved like getting pressure from the people that are short."
Later, Belfort was asked whether he thinks Robinhood will be forced out of business, prompting him to cite the bad publicity and lawsuits as (in his opinion) not a good sign for what's ahead. Asked if they are "toast" after the controversy, Belfort said they are.
"Toast, I think, but that's just my opinion," he said, adding Robinhood may not go out of business but could be sold to someone else.
See the full Yahoo Finance interview above. Earlier this week, Belfort shared a Wolf of Wall Street parody video referencing both Robinhood and GameStop:
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