The Reddit-fueled trading war that has rocketed the stock prices for companies like GameStop and AMC Entertainment could one day be the premise for a movie. It almost certainly will be, because it has every quality you’d want in a hit feature film. Suspense, conflict, drama, and underdog, villains, and… star power.
Friday the name of the one of the biggest stars on the planet found himself in the middle of the situation. Michael Jordan recently brought in hedge fun giants Gabe Plotkin and Daniel Sundhem as investors into the NBA team he owns, the Charlotte Hornets. Both Plotkin and Sundheim have reportedly taken on “catastrophic losses” in the battle between hedge fund behemoths and and rookie investors who get their marching orders from social media.
There has been very real, serious, collateral damage for established hedge funds, who reports indicate have lost over $5 billion in the past few weeks. Plotkin and Sundheim were two of the hedge fund managers who went very aggressively “shorting” GameStop, meaning they would reap profits if the stock went down, but lose big if the stock price rose. The price didn’t just rise, it took off from the free throw line like MJ at the 1987 NBA All-Star Game, soared through the air, threw down an epic dunk that defied gravity, and created a historic moment nobody on Wall Street will ever forget. And some people won’t recover from it.
GameStop stock went up more than 1700 percent. On Tuesday, Plotkin’s Melvin Capital fund essentially threw in the towel, as they closed the fund they had for GameStop and essentially swallowed their losses.
All in all, it’s been a rough year for Jordan financially, because of COVID-19 crushing NBA profits. He’s reportedly lost upwards of $230 million.
But this is Michael Jordan we’re talking about, who also had a huge hit with his “The Last Dance” documentary and a strong year for Jordan Brand shoe sales. He’s still a billionaire.