Reddit Day Trader Army Fattens Fortunes of the Super-Rich
A horde of traders on Reddit that see themselves as sticking it to the establishment by hunting for heavily shorted stocks is adding billions to the wealth of some of the world’s ultra-rich.
Chinese billionaire Wang Jianlin’s wealth surged more than $450 million through his stake in AMC Entertainment Holdings Inc. as the cinema operator spiked as much as 310% to erase last year’s pandemic-induced slump.
Chewy Inc. co-founder Ryan Cohen, meantime, added about $1.6 billion with his holding in GameStop Corp., the video-game retailer that has surged more than 1,500% this year through Wednesday. Fellow investor Donald Foss, founder of subprime auto lenderCredit Acceptance Corp., now owns a stake worth more than $1 billion.
Ellen Gordon, chief executive officer of Tootsie Roll Industries Inc., added more than $200 million to her fortune Wednesday after retail traders poured into the company’s stock, according to data compiled by Bloomberg, sending the candy maker’s shares to a record even as the broader market slumped.
Day traders have been piling into previously unloved tickers favored by short sellers in recent sessions, driving them to record highs. The meteoric rally of GameStop has already worn down some institutional investors, with Melvin Capital closing out its short position by Wednesday.
Gordon owns just over half of Tootsie Roll Industries’ common shares and 81% of its B shares, according to company filings. Her stake in the maker of Tootsie Pops, Junior Mints and Dubble Bubble gum, which she owns both directly and on behalf of other family members, is now worth more than $1.8 billion.
Cohen disclosed an investment in GameStop in August. By December, he’dpurchased 9 million shares in the retailer for a total cost of $76 million and now holds a stake worth almost $3 billion. GameStop shares were up 121% to $326.38 at 10:50 a.m. in New York after rising as much as 140% at the open, leading to at least two volatility halts.
Jianlin, the founder of closely held conglomerate Dalian Wanda Group, now owns a stake worth about $700 million in AMC, which climbed as high as $20.36 in New York trading, the most since September 2018. Jianlin has a net worth of $13.6 billion, according to theBloomberg Billionaires Index.
— With assistance by Tom Maloney, and Devon Pendleton
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