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Unless you haven’t been on the internet at all last week, you’ve undoubtedly heard of the madness on Wall Street in which Reddit users bought an insanely large amount of obsolete stocks in order to undermine them. hedge funds, most notably GameStop, which prompted several investment platforms to start restricting trading on what they called “meme stocks”. While some people made a lot of money, others lost millions, including minority Charlotte Hornets shareholders Gabe Plotkin and Daniel Sundheim, who bought a stake in the team from Michael Jordan in 2019.
Both have reportedly suffered significant losses, which obviously affects the six-time NBA champion, who has himself lost a lot of money in the past year and now has to find new investors.
Michael Jordan sold a stake in the 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 the basketball side of operations and maintained that control when he became majority owner of the Hornets four years later, making him the first former player to become majority owner of an NBA franchise. and also the sole owner of the majority black league. .
In 2019, Jordan sold a minority stake in the Hornets to hedge fund titans Gabe Plotkin, founder and chief investment officer of Melvin Capital, and Daniel Sundheim, founder and CIO of D1 Capital, both of whom have been hit hard by GameStop trading. war this week.
Charlotte Hornets’ minority owners Gabe Plotkin and Daniel Sundheim reportedly suffered massive losses in GameStop trade war
For those who aren’t familiar with what happened in the GameStop trade war last week, here’s the short version of what happened.
GameStop, the video game retailer whose shares fell in December after the company failed to hit Wall Street estimates for quarterly earnings, was one of the few outdated stocks targeted by subscribers on a Reddit forum called “wallstreetbets”. Users encouraged themselves to buy GameStop stocks en masse in order to undermine hedge funds that had taken short positions in the stock.
Charlotte Hornets’ minority owners Gabe Plotkin and Daniel Sundheim had both taken that position and stood up to make money if the price of GameStop shares went down and lose if it went up. Well, the price has certainly gone up because Reddit users were able to push the GameStop share price up 1700% in January which resulted in massive losses for Plotkin and Sundheim which could create problems for Michael. Jordan.
While there aren’t as many details on Sundheim, CNBC reported that Plotkin’s Melvin Capital, which closed its short position on GameStop on Tuesday following the short squeeze, was expected to have $ 3 billion infused from Citadel. and Item 72 just to consolidate finances, even though a report on bankruptcy would be bogus.
So how does this affect Jordan? Well, according to Radio.com, there have been rumors that MJ may be looking to sell more of his Charlotte Hornets shares and that Plotkin and Sundheim may even hope to buy the team outright. Now this is obviously pure speculation.
But even if these things aren’t true, now there’s a good chance that one or both minority owners should consider selling some of their stake in the team to help cover the losses they’ve suffered. due to the GameStop situation. This could mean that Michael Jordan may have to start looking for new investors.
Michael Jordan reportedly lost $ 300 million last year
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While Michael Jordan himself didn’t lose any money during the GameStop trade war (which we know of anyway), it’s not like he’s had the best year financially, at least in this regard. which concerns the Charlotte Hornets.
Like every NBA team since the start of the COVID-19 crisis, the Hornets have been hemorrhaging money for almost a year now. Jordan’s net worth has been reported to have fallen by around $ 300 million in the past year, which may be the reason for rumors that he may be looking to sell more stakes in the team. .
But it’s not like Jordan is going to be hungry anytime soon. Even with the loss of $ 300 million, the Double Hall of Famer is still worth around $ 1.6 billion according to Forbes, making him the richest retired athlete on the planet.
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