As individual investors piled into meme stocks and still hold a significant position in the video-game retailer, Carl Icahn started shorting it.
The billionaire investor is said to have started building his position in January of 2021. The size of Icahn's position is not known.
After the four-for-one stock split of the video game retailer in July, the stock has lost 80% of its value. On Monday, the share price closed at $25.37.
Icahn seems to be betting that the stock will fall because it's not worth as much as it used to.
Retail investors used forums like WallStreetBets to coordinate their efforts to hit institutions that had shorted the retailer during the coronaviruses epidemic.
That led to so-called "short squeezes" that badly damaged hedge funds, such as Melvin Capital, which said in May that it would be shutting down.
Selling the shares short is a way for investors to make money if the price of the stock falls. The plan is for them to borrow shares and sell them at a lower price.
According to data from Fintel, another short squeeze is possible. The stock has a short interest of over 50 million shares. By comparison, short interest in fellow meme stock AMC is at 19.7% and short interest in electric vehicle makerTesla is at 2.5%.
Icahn has never previously disclosed a bet against meme stocks, but he did in May 2021.
Insider didn't get a response from Icahn and GameStop.
The alarm is being sounded on a US recession by several people. There are a lot of dire economic warnings.
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