Unless you didn’t go online last week, you undoubtedly heard about the madness on Wall Street where Reddit users bought an insanely large amount of obsolete stock to undermine hedge funds, especially GameStop, which led several investment platforms starting to restrict trading on what they call “meme stocks” While some people made a lot of money, others lost millions, including minority shareholders of Charlotte Hornets Gabe Plotkin and Daniel Sundheim, who bought a stake in Michael Jordan team in 2019.
Both would have suffered huge losses, which obviously affects the six-time NBA champion, who lost a lot of money last year and may now have to find some new investors.
Michael Jordan sold a stake in Charlotte Hornets in 2019 to Gabe Plotkin and Daniel Sundheim
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Michael Jordan first bought a minority stake in the Charlotte Hornets franchise in 2006, when the team was still known as the Bobcats. He took control of basketball operations and maintained that control when he became the majority owner of the Hornets four years later, making him the first ex-player to become the majority owner of an NBA franchise and also the sole majority owner. alloy black.
In 2019, Jordan sold a minority stake in Hornets to hedge fund titans Gabe Plotkin, the founder and Chief Investment Officer of Melvin Capital, and Daniel Sundheim, the founder and CIO of D1 Capital, both of whom were hit hard by the deal from GameStop war this week.
Minority owners of Charlotte Hornets, Gabe Plotkin and Daniel Sundheim, reportedly suffered massive losses in the GameStop trade war
For those unfamiliar with what happened in the GameStop trade war last week, here is a short version of what happened.
GameStop, a video game retailer whose shares plummeted in December after the company failed to meet Wall Street’s quarterly revenue estimates, was one of the few obsolete stocks targeted by subscribers to a Reddit forum called “wallstreetbets”. Users encouraged each other to buy GameStop shares in bulk, in order to undermine the hedge funds that had taken short positions on the shares.
Minority owners of Charlotte Hornets, Gabe Plotkin and Daniel Sundheim, had taken that position and could make money if GameStop’s stock price fell and lose money if it went up. Well, the price certainly went up because Reddit users were able to raise GameStop’s share price by 1700% in January, which resulted in massive losses for Plotkin and Sundheim, which could create some problems for Michael Jordan.
While there are not as many details out there about Sundheim, CNBC reported that Melvin Capital of Plotkin, which closed its short position on GameStop on Tuesday as a result of the short tightening, had to have $ 3 billion infused from Citadel and Point 72 just to sustaining your finances, although a report on a bankruptcy filing is considered false.
So, how does this affect Jordan? Well, according to Radio.com, there were rumors that MJ might be looking to sell more of his Charlotte Hornets shares and that Plotkin and Sundheim might even be hoping to buy the team right away. Now, this is obviously pure speculation.
But even if these things are not true, there is now a high chance that one or both of the minority owners may have to sell part of their stake in the team to help cover losses incurred due to the GameStop situation. This may mean that Michael Jordan may need to start looking for some new investors.
Michael Jordan reportedly lost $ 300 million last year
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Although Michael Jordan himself did not lose any money during the GameStop trade war (which we know anyway), it is not as if he had the best financial year, at least as far as the Charlotte Hornets are concerned.
As with all NBA teams since the beginning of the COVID-19 crisis, the Hornets have been losing money for almost a year. Jordan’s net worth has been reported to have dropped by around $ 300 million in the past year or more, which may be the reason for rumors that he may be looking to sell more stake in the team.
But it’s not like Jordan is going to be hungry anytime soon. Even with the $ 300 million loss, the twice Hall of Famer is still worth about $ 1.6 billion according to Forbes, which still makes him the richest retired athlete on the planet.