Carl Icahn is Worth $23 Billion — And He's Reportedly Betting Against GameStop's Stock It was reported Monday that the billionaire of Icahn Enterprises is holding an unknown position in GameStop for shorting.
Opinions expressed by Entrepreneur contributors are their own.
The meme stonks aren't flying like they used to — and one billionaire is reportedly poised to take advantage.
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, Bloomberg reported, citing "people familiar with the matter."
The sources added that Icahn began developing the short-trade, which is when people bet against a stock — i.e., they bet it will go down, and then they made money on it — after GameStop reached meteoric heights in January 2021.
This is interesting for the meme stock saga and market news in general. When a person or entity shorts a stock, they borrow a share from some sort of intermediary at a market price of, for example, $100. You have to pay it back eventually, but if you sell it for the current price on the open market, then you can buy back your old share for less money.
So, if the stock goes down, say, to $50, you end up paying back $50 a share — you get to pocket the $50, minus various fees and interest that tend to come into play.
Ichan, per the report, is holding a large bet of unknown size in GameStop he bought when a frenzy of meme-stockers took on Wall Steet and bought up shares of floundering video game retailer GameStop, costing traditional players, like hedge funds, some $20 billion dollars.
GameStop's stock price went from about $4 a share to a high of around $483 a share in January 2021. Other businesses that got the meme treatment included AMTD Digital and Bed Bath & Beyond.
"The power dynamic has shifted," Guy Warren, chief executive officer of FinTech ITRS Group, told The Trade about the event.
GameStop's stock is still pretty elevated, at $25 a share. When a company's price is still up, but there might not be underlying business value, such as in assets or liabilities, some schools of investment thought would call that "not trading on its fundamentals" i.e., its business fundamentals.
That is reportedly what Icahn is betting. "The investor, who has added to his position from time to time, is betting that GameStop's stock isn't trading on its fundamentals and will continue to fall, the people said," Bloomberg wrote.
There are inklings that other people are looking to make money on GameStop falling down from the meme-stock cloud. Insider reported Tuesday that short interest for the stock is up comparable to AMTD Digital, for example.
Icahn is No. 55 on Bloomberg's Billionaires Index with a net worth of around $23 billion.
