Billionaire tech investor Chamath Palihapitiya told CNBC Wednesday that he closed out his position in GameStop, one day after joining the trading frenzy around the videogame retailer. He also defended the power of individual investors to compete with Wall Street hedge funds.
The CEO of Social Capital and former Facebook executive tweeted Tuesday that he bought $125,000 worth of February $115 GameStop call options after asking his followers on Twitter what to buy. Calls are derivatives that give the buyer the right to purchase a stock at a set price. The trader makes money when the stock rises above the strike price. GameStop stock opened Wednesday at $354 per share, up more than 1,550% this year alone.
On CNBC’s “Fast Money: Halftime Report” on Wednesday, Palihapitiya said, “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.”