GameStop’s insane and dramatic stock chaos may have cost NBA legend Michael Jordan half a billion dollars, dropping his net worth significantly.
NBA legend Michael Jordan may have lost half a billion dollars on the great GameStop saga. The iconic former Chicago Bulls player doesn’t have to worry about money thanks to his brand partnerships, successful basketball career, and more, but losing $500 million thanks to betting against GameStop isn’t something one can shake off with ease.
The GameStop saga has been one with high-stakes for nearly everyone involved. Although it potentially saved GameStop from bankruptcy, the volatility was deadly for any investor. The GameStop stock skyrocketed from a mere $20 at the start of 2021 to nearly $500 at its all-time peak, a record high for the struggling retailer. The sudden jump from double digits to high triple digits was sparked when Reddit users noted that GameStop was one of the most shorted stocks, meaning the likes of hedge funds had been betting on its demise. The Reddit army along with many other average people with some money to burn realized they could cause the stock to soar by investing heavily into it, all until hedge funds covered their shorts which would cause it to rise further.
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GameStop’s stock eventually came crashing down, but it still took a few casualties with it, potentially among them the great Michael Jordan (via Chicago Sun Times). Jordan’s net worth was previously valued at $2.1 billion as of April 2020 but Forbes is reporting his net worth tumbled all the way down to $1.6 million. The basketball icon now owns the Charlotte Hornets and two years ago, he sold a minority share to Gabe Plotkin, founder of Melvin Capital. Melvin Capital was one of the hedge funds that shorted GameStop and got severely hurt, requiring billions in cash support in the fallout. It hasn’t been confirmed that this is the cause of the big dip in Jordan’s net worth, but is largely speculated to be a factor.
Michael Jordan is still a billionaire, so he’ll be fine, but a $500 million loss is nothing to scoff at. GameStop plans to transition to an ecommerce business model and these new plans have caused the retailer’s stock to soar yet again. Whether or not it’ll pay off, in the long run, remains to be seen. Regardless, retail investors are bound to continue holding the feet of hedge funds over the fire for a while.
GameStop is expected to live to fight another day as Chewy.com founder Ryan Cohen helps lead the charge on a new era for the retailer. This, unfortunately, meant losing key board members like Reggie Fils-Aime in the process, but it’s a loss that may need to be incurred in order to keep the gaming retailer afloat. Only time will tell how successful it manages to be and if it can go toe-to-toe with other ecommerce platforms like Amazon. For now, though, it appears to have taken a chunk out of a giant on the hardwood.
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Source: Chicago Sun Times, Forbes
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