According to ESPN, Michael Jordan, the NBA legend, is reportedly in talks to sell his majority stake in the Charlotte Hornets to a consortium led by Gabe Plotkin and Rick Schnall. Plotkin, a hedge fund billionaire, might be familiar to Fortune readers as he was at the center of the GameStop saga during the pandemic.
During the height of the meme-stock frenzy in 2021, retail traders on forums such as Reddit, specifically on the page r/WallStreetBets, came together to drive up shares of GameStop, using the commission-free brokerage platform Robinhood. Melvin Capital Management, the hedge fund managed by Plotkin, had shorted the video game retailer. The traders also bought up other stocks that the hedge fund had shorted.
Melvin Capital suffered significant losses during the short squeeze, losing approximately $6.8 billion in January 2021 alone, one of the quickest declines for a hedge fund since the 2008 financial crisis. Point72 and Citadel, two other hedge funds, invested cash in Melvin Capital during the short squeeze, but they later withdrew their investments. Eventually, Melvin Capital announced that its fund would close in June 2022.
This saga sparked a House committee hearing in February 2021, with lawmakers concerned about the impact of social media chatter on real-world issues.