Billionaire tech investor Chamath Palihapitiya told CNBC on Wednesday that he closed out his position in GameStop, one day after joining the trading frenzy around the video game retailer.
Palihapitiya also defended the power of individual investors to compete with Wall Street hedge funds.
The CEO of Social Capital and former Facebook executive tweeted Tuesday that he bought $125,000 worth of February $115 GameStop call options after asking his followers on Twitter what to buy. Calls are derivatives that give the buyer the right to purchase a stock at a set price. The trader makes money when the stock rises above the strike price. GameStop stock opened Wednesday at $354 per share, up more than 1,550% this year alone.
Lots of $GME talk soooooo….
We bought Feb $115 calls on $GME this morning.
— Chamath Palihapitiya (@chamath) January 26, 2021
Wednesday on CNBC’s “Fast Money: Halftime Report,” Palihapitiya said, “I ended up closing out my position this morning, and I wanted to announce that I’m taking all the profits that I made plus my original position — I’m going to take $500,000 and I’m going to donate it.”
Palihapitiya dismissed Wall Street criticism about how individual investors are banding together on social media — particularly the wallstreetbets Reddit message board, and short-squeezing GameStop and a handful of other stocks like pros — as hypocritical. He said hedge funds try to push stocks around all the time.
Allowing hedge funds to go short 140% of GameStop shares could be seen as irresponsible, he said. “To a normal person that doesn’t make any sense. But to a Wall Street mathematician, that’s the game that’s been played. And that game came undone.”- READ MORE
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