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Home Business Reddit investor offensive is also enriching billionaires - Markets

Reddit investor offensive is also enriching billionaires – Markets

Daytraders gathered on the Reddit platform – who consider themselves status quo fighters when hunting short stocks – ended up increasing the fortunes of some billionaires.

Larry Chen, president and CEO of GSX Techedu, saw his net worth rise by $ 4.2 billion on Wednesday when the shares of the Beijing-based online education company jumped 36%. Chen’s fortune reached 15.6 billion on the Bloomberg Billionaires Index.

His fellow countryman Wang Jianlin’s assets were increased by $ 773 million due to his participation in AMC Entertainment Holdings. A huge movement of independent investors caused the stock to rise 310%, despite the fall of the market as a whole. Hedge funds like Mudrick Capital, which owned 4.6 million shares in the cinema chain on January 4, also came out on top.

Ryan Cohen, co-founder of Chewy, became $ 1.8 billion richer thanks to participation in the game retailer GameStop, whose share has advanced more than 1,700% this year alone. Donald Foss, founder of the auto credit company Credit Acceptance, owns a stake in GameStop that today is worth about $ 1.2 billion, according to the index compiled by Bloomberg.

Even the CEO of Tootsie Roll Industries did well. Ellen Gordon’s fortune grew 185 million after the candy maker’s shares hit a record high. National Beverage founder Nick Caporella saw his net worth rise by $ 1.8 billion to $ 6.8 billion after the shares of the owner of carbonated water brand LaCroix jumped 40%.

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Day traders have dedicated themselves to stocks that were aimed at those who bet on falling securities. As a result, the shares that were short sold ended up rising to record levels. The astronomical boom in GameStop’s stock has already shaken institutional investors and Melvin Capital was forced to liquidate its short position on Wednesday.

The search for stocks with a strong share of short sales is led by a forum on the Reddit platform called WallStreetBets, with 2.8 million users. Some of them took a more activist stance, contextualizing the initiative as a way to combat social problems such as financial inequality and the unjust distribution of resources between generations.

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