CIBC CEO sees low interest rates as fueling froth in reddit stocks
The Reddit-led hunt for heavily shorted stocks is adding billions to the wealth of some of the world’s ultra-rich.
Ellen Gordon, chief executive officer of Tootsie Roll Industries Inc., added more than US$200 million to her fortune Wednesday after retail traders poured into the company’s stock, according to data compiled by Bloomberg, sending the candy maker’s shares to a record even as the broader market slumped.
The wealth of Chinese billionaire Wang Jianlin surged more than US$450 million through his stake in AMC Entertainment Holdings Inc. as the cinema operator spiked as much as 310 per cent to erase last year’s pandemic-induced slump.
Chewy Inc. co-founder Ryan Cohen, meantime, added about US$1.6 billion with his holding in GameStop Corp., the video-game retailer that has surged more than 1,500 per cent this year through Wednesday. Fellow investor Donald Foss, founder of subprime auto lender Credit Acceptance Corp., also benefited and now owns a stake worth more than US$1 billion.
Day traders have been piling into previously unloved tickers favored by short sellers in recent sessions, driving them to record highs. The meteoric rally of GameStop has already worn down some institutional investors, with Melvin Capital closing out its short position by Wednesday.
Gordon owns just over half of Tootie Roll Industries’ common shares and 81 per cent of its B shares, according to company filings. Her stake in the maker of Tootsie Pops, Junior Mints and Dubble Bubble gum, which she owns both directly and on behalf of other family members, is now worth more than US$1.8 billion.
Cohen disclosed an investment in GameStop in August. By December, he’d purchased 9 million shares in the retailer for a total cost of US$76 million and now holds a stake worth almost US$3 billion. GameStop shares were up 121 per cent to US$326.38 at 10:50 a.m. in New York after rising as much as 140 per cent at the open, leading to at least two volatility halts.
Jianlin, the founder of closely held conglomerate Dalian Wanda Group, now owns a stake worth about US$700 million in AMC, which climbed as high as US$20.36 in New York trading, the most since September 2018. Jianlin has a net worth of US$13.6 billion, according to the Bloomberg Billionaires Index.
--With assistance from Tom Maloney and Devon Pendleton.