"Massive Quick" investor Michael Burry blows up buying and selling apps and calls Robinhood a "harmful on line casino"


"The Big Short" investor Michael Burry.

  • "The Big Short" investor Michael Burry criticized zero-commission trading apps on Tuesday.
  • Some sell orders are pouring into Wall Street, encouraging risky, short-term betting, Burry said.
  • Burry also blew up Robinhood's gamification of investing, calling its app a "dangerous casino".
  • You can find more stories on the Business Insider homepage.

Michael Burry turned down the idea that Robinhood and other trading apps would empower retail investors and disrupt the financial industry in a Tuesday tweet.

"The #mainstreetrevolution is a myth," said the head of Scion Asset Management. "Zero commissions and gamified apps were designed to direct the flows to the two most influential WS trading houses."

Burry, best known for his starring role in Michael Lewis' book "The Big Short", was referring to Robinhood and some of his colleagues who sold their order flows to Wall Street firms like Citadel.

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"A couple of HFs were injured," Burry said, referring to short sales of hedge funds like Melvin Capital that lost money during the January meme stock boom.

"But as retail moves towards more retail and away from fundamentals, WS owns this game," he continued. "#Stonks of Design."

In other words, Burry believes that the new generation of cheaper, fun, and easy-to-use trading platforms is helping Wall Street rather than improving it. Specifically, they send order flows to companies like Citadel and get people into day trading rather than long term investments, playing to the strengths of professional operations.

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Burry singled out Robinhood in a tweet last week and shared screenshots from the app to argue that this is becoming an investment in a casino game.

"If this looks like a serious investment app to you, and NOT a dangerous casino that is fun for all ages, you've been #gamified," he said.

Robinhood did not immediately respond to a request for comment from Insider.

Burry's comments could have added weight as he was likely a major beneficiary of the retail investment boom. Scion owned 1.7 million GameStop shares at the end of September, which it could have sold for more than $ 250 million last month during the buying spree.