The meme-stock frenzy has turned markets into a 'casino society,' says billionaire businessman Barry Sternlicht

Barry Sternlicht. Craig Barritt/Getty Images Craig Barritt/Getty Images
Barry Sternlicht stated that the tech stock and meme crazes have created a "casino society."

Starwood Capital's chief compared the market today to the dotcom bubble.

The billionaire businessman said it's a "complete and total speculative bubble".

Barry Sternlicht, CEO of Starwood Capital Group, stated that a new highly speculative stock exchange has emerged in the meme-stock frenzy.

Sternlicht stated Wednesday on CNBC's Squawk Box that "you really have two stock market today." "You have the one that I grew up with. I attended business school and learned about discounted cash flows, companies' ability pay dividends and how to grow.

He said that "and then you have complete casino society," in reference to the year's meme stock frenzy. He said it's a "complete and total speculative bubble."

He is a billionaire businessman whose company has around $100 billion in assets under his management. He said, "There are a lot warning signs that we're in 2000 and 2001, before the Nasdaq fell 82%."

Both the dot-com bubble as well as the meme-stock craze had one thing in common: high levels retail participation.

Meme stocks were a regular fixture in the markets when a large number of social media-savvy retail traders drove massive rallies in shares of short-term, struggling companies such as GameStop and AMC. Wall Street warned against "gambling" with meme stocks, stating that stock prices are completely disconnected from the company's true value and could crash at any time.

Sternlicht stated that meme stocks aren’t the only reason for market panic, given the many multiples on tech companies. The Nasdaq rose 13% this year to an all-time high of 9.9 in September.