'This Is A Terrible Situation': Major Brokerage CEO Sounds Alarm On GameStop, AMC And Meme Stocks

Interactive Brokers Group Inc IBKR founder and chairman Thomas Peterffy joined CNBC’s Squawk On The Street Tuesday to discuss current trends in trading. Host Sara Eisen asked Peterffy about "meme stocks" like GameStop Corp GME and AMC Entertainment Holdings AMC and Peterffy replied with a stark warning: “I feel so sorry for these people who are going to lose all of their money.” 

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Interactive Brokers, which has an intricate layout with a variety of options, has a lot of professional traders as clients, Petterfy said. Because there are so many professional, or institutional, traders on the platform, there are just about as many people short AMC or GameStop as there are people long those names on Interactive Broker.

This means that Petterfy’s insights into what’s going on with those names may be different from what a brokerage like Robinhood would see, due to its user base being mostly retail investors rather than professional traders.

Watch The Full Interview Here. 

During the interview, Petterfy explained that eventually the hype and buzz around the stocks will die out if the companies do not start making money. 

“Look, eventually there is no magic here,” Petterfy said. “If the company doesn’t make money, the stock can’t float high forever.” 

But, Petterfy admits that he has been saying that about GameStop and AMC for a while, and he’s been wrong. He also said the fact there are a lot of people both long and short is great for the trading business. 

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