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Carl Icahn, a longtime investor, billionaire, and chairman of the board of Icahn Enterprises reportedly holds a "large bet" against the video game retailer GameStop.
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GameStop stock has lost 79% of its value since the meme stock frenzy, once the four-for-one stock split the video-game retailer executed in July is accounted for. The shares closed at $25.37 on Monday. Icahn appears to be betting that the stock will carry on falling, as its value is detached from its fundamentals. Short interest in GameStop's stock is very high, with 17.53% of the company's outstanding shares shorted as of Oct. 31.
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The billionaire investor reportedly started building his position in January 2021, when GameStop shares rocketed from $61 to an all-time high of $483 in just one week. The size of Icahn's position is not clear.
Why it matters
Retail investors piled into GameStop and other meme stocks during the coronavirus pandemic, using forums like Reddit's WallStreetBets to coordinate their efforts to hit institutions that had shorted the retailer. That led to so-called "short squeezes" that badly damaged hedge funds including Melvin Capital, which said in May that it would be shutting down after losing billions of dollars on GameStop. Data from Fintel suggest another short squeeze against GameStop could be building. Short interest in the stock is at 21.05% of the float or around 53.37 million shares.
