DoubleLine Capital CEO Jeffrey Gundlach said he believes the massive buying frenzy among retail investors is “downright terrifying.”
“This is a terrible sign for the condition of the market for anybody who’s experienced a significant number of cycles, which I’ve definitely experienced,” Gundlach said during a recent investor webcast.
“It looks like people are kind of re-gifting the candy the con has given them ... they are throwing that candy into this retail investment fervor,” he said, CNBC reported.
“We just see how much trading is going on in retail,” he said, describing it as “downright terrifying.”
Meanwhile, Robinhood Markets Inc. is the fintech startup credited with helping popularize trading among millennials.
Robinhood has been at the center of a recent upsurge in day trading by retail investors, who have been homebound due to coronavirus lockdowns. The higher-than-usual traffic on its app has led to multiple outages since early March, Reuters explained.
Robinhood is one of the most popular and well-funded fintech startups in the United States, having been valued at $11.2 billion in its most recent funding round.
The company, however, has been criticized for not doing enough to moderate excesses after one of its customers took his life believing he had lost more than $730,000 using the free trading app.
Robinhood is also being investigated by the U.S. Securities and Exchange Commission and the Financial Regulatory Authority over the handling of an outage in March, Bloomberg News reported.
Investigators are also focusing on the company's lack of customer response, the report added.
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