(Forbes) Donald Foss, a subprime-lending billionaire and previously one of GameStop's biggest shareholders, sold off his entire stake in the company by the end of last year, a Friday regulatory filing shows–cashing in on massive gains but largely missing the peak price mania that happened just a couple weeks ago.
KEY FACTS
Foss, the founder and former CEO of subprime auto-lender Credit Acceptance, closed out his GameStop position on December 31, according to a filing with the Securities and Exchange Commission released Friday evening.
The 76-year-old previously disclosed the acquisition of slightly more than 3.5 million shares on February 28, 2020–a chunk of stock then worth $12.7 million and representing about 5% of shares outstanding.
Boosted by a simmering fervor among at-home traders at the tail-end of last year, shares skyrocketed about 420% by the time Foss sold off his GameStop stock, catapulting the value of his disclosed stake to more than $66 million at the time.
Though still stunning, those gains are nothing compared to the 9,550% run up in prices by January 27, when GameStop shares closed at an eye-popping high of $347.51–leading to reports that Foss' stake had surged to more than $1.2 billion.
It's unclear whether he's since purchased additional shares, but he may have done so; in an interview with Forbes published February 5, Foss conceded to having sold "a lot" of his stake and said he was still long GameStop shares.
Representatives for Foss and GameStop did not immediately respond to Forbes' requests for comment Saturday.
KEY BACKGROUND
The glut in short interest that sparked the Reddit-fueled price mania has largely subsided, Goldman Sachs said in a note to clients Wednesday, and prices have largely tumbled as a result. GameStop stock has plunged 85% since its peak, but had Foss held on to his 3.5 million shares, they'd still be worth about $183 million today–nearly three times their value on December 31.
CRUCIAL QUOTE
"I had never even heard of Reddit until the stock started to rise. Then I called my son and asked, ‘What is this Reddit thing?’ He tried to explain it to me; I just couldn't wrap my brain around it," Foss told Forbes this month, asserting he did not believe the booming prices were warranted. "Nobody has ever seen [anything] like this. And I’ve been an investor for a long time."
TANGENT
GameStop's meteoric high minted a temporary billionaire in Ryan Cohen, the cofounder and former CEO of Chewy, the booming e-commerce firm selling pet food and supplies. At one point amassing a fortune of more than $2 billion, he's now worth about $795 million, according to Forbes.
WHAT TO WATCH FOR
On Thursday, the House Financial Services Committee will hold a hearing to discuss the recent market volatility sparked by so-called meme stocks like GameStop. Goldman Sachs says topics likely to be explored will include the gamification of retail investing, the capitalization of broker-dealers and the mechanics of short-covering. Executives of Reddit, online brokerage Robinhood and market-maker Citadel are all set to testify.
