Michael Jordan paid $275 million for a majority stake in the Charlotte Hornets in 2010. Now NBA legend, according to ESPNis in talks to sell that stake to a consortium led by Gabe Plotkin and Rick Schnall, who are minority owners of the Hornets and Atlanta Hawks, respectively.
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may be familiar with plotkin Luck The reader was a hedge fund billionaire in another context in the center Did Gamestop saga at the height of meme-stock mania during the pandemic.
In 2021, retail traders communicating in online forums such as Reddit, particularly the page r/WallStreetBets, banded together to drive up shares of GameStop, often trading on the commission-free brokerage platform Robinhood. Plotkin's Melvin Capital Management had bet to short or against the video game retailer. The army of traders also bought other stocks that had been shorted by hedge funds.
In January 2021 alone, Melvin Capital There was a loss of about $ 6.8 billion, one of the sharpest declines for hedge funds since the 2008 financial crisis. Fellow hedge funds Point72 and Citadel invested cash in Melvin Capital during the so-called short squeeze, but pulled their investments a little more than a year later. Melvin Capital finally announced that its fund would close in June 2022.
sonnet a spark house committee hearing In February 2021, with many MPs being concerned about the potential of social media chatting to cause real world problems.
This also showed how powerful became a retail investor.
Plotkin, who was a superstar in the hedge fund world—posting returns of nearly 30% annually for six years with the help of bearish bets—went away from managing outside capital and wrote To investors: “I apologise. In hindsight and despite our intentions, we now believe that we have focused on future returns and team continuity without adequate consideration of your investment losses.
Citadel CEO Ken Griffin later criticized the meme stock traders who pulled off the huge short squeeze.
“You feel good about it?” he asked in a program Hosted by Bloomberg Intelligence in New York last year. “It's not Gabe's money you're taking down. You're taking out a teacher's pension scheme money.
In 2020, before the GameStop trading saga, Jordan sold a significant minority stake in the Hornets to Plotkin and D1 Capital CEO Daniel Sundheim. (According to ESPN, Sundheim is part of a consortium that is looking to buy the team.)
The Hornets have never won an NBA championship and currently hold a record of 22–49. Their value was estimated at $ 1.7 billion By forbes In October, it ranked just 27th among the league's 30 teams in terms of value. The Golden State Warriors topped the list with $7 billion.
According to ESPN, Jordan, a six-time NBA champion, will retain a minority stake when the deal is completed.
This story was originally featured fortune.com
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