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How Did Michael Jordan Lose $500 Million in 2020?
When Michael Jordan played in the NBA, he earned more than most could ever dream of. Now, at 58 years of age, Jordan has earned himself a place as one of the richest athletes of all time. His net worth is in billions, all a result of his NBA earnings, endorsements, and smart business decisions.
Of course, anyone owning businesses has to bear losses, some of which might be more difficult to deal with.
One such noticeable loss seemed to have affected Michael Jordan in 2020, the Chicago Bulls legend lost $500 million. The reason for the loss, however, might or might not be related to Gamestop or the Charlotte Hornets – the NBA team Jordan owns.
Was Michael Jordan’s $500 million loss from GameStop?
In 2020, Forbes had Jordan’s net worth listed at $2.1 billion. This year, it dropped to $1.6 billion. The drop immediately raised questions, Jordan’s net worth already being a hot topic. A $500 million drop is no joke either, indicating some significant dip in Jordan’s income. After some time, people connected the loss back to GameStop, an electronics retail company.
Despite the connection people seem to have made, no official report links Jordan’s $500 million loss to GameStop. Forbes simply changed his net worth, lacking any sort of explanation.
Why might Jordan have lost money due to GameStop?
In January 2021, GameStock’s stock price rose to a whopping $350. A day later, it dropped, only to rise to $325 before it dropped to $50 again, and then was back up to $150. In an article, Celebrity Net Worth’s founder Brian Warner discussed the same, even explaining Jordan’s connection to GameStop.
In 2019, Jordan sold minority shares (20%) of the Hornets to two investors. One of them was Gabe Plotkin, who owns Melvin Capital – a hedge fund related to GameStop.
WATKINS GLEN, NEW YORK – AUGUST 08: NBA Hall of Famer Michael Jordan and co-owner of 23XI Racing looks on from the 23XI Racing pit box during the NASCAR Cup Series Go Bowling at The Glen at Watkins Glen International on August 08, 2021 in Watkins Glen, New York. (Photo by Jared C. Tilton/Getty Images)
That being said, GameStop’s stoke price fluctuation was a result of ‘short squeeze’. This was kept going by investors, who were reportedly from Reddit’s “Wall Street Bets” subreddit.
Melvin Capital had a big short bet against the company, which is essentially a bet that some company’s stock price will fall. As a result, on January 31, a rise in GameStop’s stock caused Melvin Capital’s investments to lose 53% of their value. While they did recover later, they needed additional cash in billions from other hedge funds as the value of their assets dropped to $6 million from $12 million.
If Jordan did lose money due to GameStop, it would indicate some investment with Plotkin. However, a $500 million loss would mean an investment worth around $1 billion, which seems unlikely. While he might have lost some money if he had investments with Plotkin, one cannot assume his Airness had a billion invested with them.
The Charlotte Hornets and COVID-19
Another cause for the loss could be the Hornets, who might have lost significant value due to the COVID-19 pandemic and how the NBA continued with no fans allowed into arenas.
CHARLOTTE, NC – NOVEMBER 5: NBA Legend and Charlotte Hornets Owner, Michael Jordan looks on during a game between the Indiana Pacers and the Charlotte Hornets on November 5, 2019 at Spectrum Center in Charlotte, North Carolina. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory Copyright Notice: Copyright 2019 NBAE (Photo by Brock Williams-Smith/NBAE via Getty Images)
More importantly, a large chunk of Jordan’s net worth is thanks to his ownership of the NBA team. A loss over there is quite capable of displacing $500 million in his net worth. With things being difficult for the NBA financially last year, the Hornets must have surely suffered.
Either way, no reason was ever confirmed officially. The $500 million loss can also be a combination of his investments, Air Jordan, and the team. However, with most companies private, nothing can be determined.
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Michael Jordan Net Worth 2021
As mentioned above, Jordan’s net worth is at $1.6 billion as of now. While in the NBA, he earned $98 million, his salary dropping when he played with the Washington Wizards. Apart from the Hornets – which were purchased at $175 million – Jordan has investments with Sportrador, Muzik, and aXiomatic.
Michael Jordan turns 58 today.
net worth: $1.6 billion
richest athlete alive
world’s first billionaire athlete
endorsements with some of the world’s most recognized brands (@Nike, @CocaCola, @McDonalds, @chevrolet, @Gatorade, @Hanes and @UpperDeckSports) pic.twitter.com/93Uc6i6HOR
— Boardroom (@boardroom) February 17, 2021
He evens owns a Nissan car dealership, along with five restaurants with the Cornerstone Restaurant Group as a partner. His deal with Nike, which started with a five-year, $500 thousand contract, has been most beneficial for him. As per Forbes, the six-time NBA champion’s deal with Nike is now worth $1.3 billion.
How do you think Jordan lost the $500 million in his fortune? Can his future investments make that money back?
The post How Did Michael Jordan Lose $500 Million in 2020? appeared first on EssentiallySports.
