Michael Jordan paid $275 million for a majority stake in the Charlotte Hornets in 2010. Now the NBA legend, according to ESPN, is in talks to sell that stake to a consortium led by Gabe Plotkin and Rick Schnall, minority owners of the Hornets and Atlanta Hawks, respectively.
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Plotkin might be familiar to Fortune readers in another context. The hedge fund billionaire was at the center of the GameStop saga at the height of the meme-stock frenzy during the pandemic.
In 2021, retail traders communicating in online forums like Reddit, in particular 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 shorted, or bet against, the video game retailer. The army of traders also bought up other stocks the hedge fund had shorted.
In January 2021 alone, Melvin Capital lost about $6.8 billion, suffering one of the fastest declines for a hedge fund since the 2008 financial crisis. Fellow hedge funds Point72 and Citadel made cash investments in Melvin Capital during the so-called short squeeze, but a little over a year later they pulled their investments. Melvin Capital eventually announced that its fund would close in June 2022.
The saga sparked a House committee hearing in February 2021, with many lawmakers worried about the ability of social media chatter to cause real-world problems.
It also showed just how powerful retail investors had become.
Plotkin, who’d been a superstar in the hedge fund world—posting returns of around 30% annually for six years with the help of bearish wagers—stepped away from managing external capital and wrote to investors: “I apologize. In hindsight and despite our intentions, we recognize now that we focused on future returns and team continuity without sufficient consideration of your investment losses.”
Citadel CEO Ken Griffin later criticized the meme stock traders who pulled off the mammoth short squeeze.
“You feel good about that?” he asked at an event hosted by Bloomberg Intelligence in New York last year. “It’s not Gabe’s money that you are taking down. You’re taking down the money of a pension plan that belongs to a teacher.”
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 the consortium looking to buy the team.)
The Hornets have never won an NBA championship and currently have a 22-49 record. They were valued at $1.7 billion by Forbes in October, ranking it at just No. 27 among the league’s 30 teams in terms of value. The Golden State Warriors took the top spot at $7 billion.
Jordan, a six-time NBA champion, would keep a minority stake if the deal is completed, according to ESPN.
This story was originally featured on Fortune.com
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