Chamath Palihapitiya Says He Exited GameStop Long Position

Tech investor Chamath Palihapitiya says he exited a long position in GameStop, apparently via options, earning hundreds of thousands of dollars. He'll donate the proceeds.
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Chamath Palihapitiya, chief executive of Social Capital, on Wednesday said he exited his long GameStop  (GME) - Get Report position this morning.

The head of the Palo Alto, Calif., venture-capital firm apparently established the position through options and earned hundreds of thousands of dollars in profit.

On Tuesday he'd said on Twitter that he'd bought $125,000 of February $115 GameStop call options, after querying his Twitter acolytes as to what he should purchase.

Palihapitiya told CNBC Wednesday, “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.” 

The short squeeze for multiple companies with poor fundamentals began on Friday when Andrew Left, managing partner of short seller Citron, said it was abandoning GameStop because of harassment from bulls. 

Before and after his remarks, retail investors have been buying shares of the videogame retailer like there’s no tomorrow.

Other stocks that have seen big-time short squeezes include AMC Entertainment  (AMC) - Get Report, Bed Bath & Beyond  (BBBY) - Get Report, BlackBerry  (BB) - Get Report and Koss  (KOSS) - Get Report.

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Jim Cramer Says GameStop Shorts Deserved the Squeeze

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GameStop Soars as Retail Battles Wall Street

AMC Skyrockets in Short Squeeze

What’s happening is that retail investors have entered a manic phase, snapping up everything from special purpose acquisition companies to initial public offerings to bitcoin. 

Inspired by commentary on the likes of Robinhood Financial’s brokerage platform and Reddit’s WallStreetBets, they’re jumping into positions like Olympic divers. 

But for many, their landings might not be smooth. Market booms eventually turn to busts.

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