<p><img src="https://static2.businessinsider.com/image/60103ea21d2df20018b70dfc-2400/chamath-palihapitiya-3.jpg" border="0" alt="Chamath Palihapitiya, social+capital partnership, sv100 2015" data-mce-source="Brian Ach/Getty" data-mce-caption="Chamath Palihapitiya of Social+Capital Partnership speaks onstage at the TechCrunch Disrupt NY 2013 at The Manhattan Center on April 29, 2013 in New York City. (Photo by Brian Ach/Getty Images for TechCrunch)"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><ul><li><strong>Billionaire investor Chamath Palihapitiya joined Reddit investors and piled into GameStop with a purchase of bullish call options on Tuesday.</strong></li><li><strong>Palihapitiya tweeted on Tuesday that he purchased $115 call options that expire on February 19.</strong></li><li><strong>"Let's gooooooo!!!!!!!!" Palihapitiya tweeted.</strong></li><li data-stringify-indent="0"><strong data-stringify-type="bold"><a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest" target="_blank" rel="noopener noreferrer" data-stringify-link="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell" data-sk="tooltip_parent">Sign up here for our daily newsletter, 10 Things Before the Opening Bell</a></strong><strong data-stringify-type="bold">.</strong></li></ul><hr><p>Chamath Palihapitiya has followed investors of the popular WallStreetBets forum on Reddit and bought out-of-the-money call options on <a href="https://markets.businessinsider.com/stocks/gme-stock">GameStop</a>, according to a <a href="https://twitter.com/chamath/status/1354089928313823232">Tuesday tweet.</a></p><p>On Monday, the billionaire investor asked his 804,000 Twitter followers "what to buy tomorrow" and said he would "throw a few 100 k's at it" if he was convinced.</p><p>The chorus of responses ranged from cryptocurrencies to electric vehicle stocks, but in the end GameStop won out.</p><p>"Lot's of $GME talk soooooo.... We bought Feb $115 calls on $GME this morning. Let's gooooooo!!!!!!!!," Palihapitiya tweeted.</p><p>Based on a screenshot attached to the tweet, Palihapitiya bought 50 call options in GameStop with a strike price of $115 and an expiration date of February 19. Based on Tuesday morning trading prices of around $25, a single contract of the specific option costs $2,500, bringing Palihapitiya's total purchase price of the options to about $125,000.</p><p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/stocks-to-buy-sports-betting-picks-growth-industry-morgan-stanley-2021-1" target="_blank" rel="noopener">MORGAN STANLEY: Buy these 9 sports-betting stocks ahead of the industry's expected legalization in 12 states this year and its growth to $10 billion in 2025</a></em></p><p>Assuming Palihapitiya did pay $2,500 per contract, GameStop would need to surge more than 60% from Tuesday morning trading levels to $140 for Palihapitiya's option bet to turn a profit, accounting for the premium paid on the options. The options contract itself would be in-the-money roughly 28% above the current level of $89.50 as of 12:10 p.m. ET.</p><p>If GameStop is trading above $140 by February 19, Palihapitiya could exercise the call options upon expiry, allowing him to pay $575,000 for 5,000 shares of GameStop at $115 per share. Alternatively, if GameStop soars between now and February 19, Palihapitiya could sell the options contracts for a higher price than he paid for them. </p><p>Palihapitiya is joining a group of retail investors that have sparked a massive short squeeze in the video-game retailer. The stock <a href="https://markets.businessinsider.com/news/stocks/gamestop-stock-price-gme-reddit-retail-day-traders-wallstreetbets-citron-2021-1-1029999747'utm_source=markets&utm_medium=ingest">soared as much as 145%</a> in Monday's trading session on no apparent news.</p><p>That spike led hurt one hedge fund, Melvin Capital, <a href="https://markets.businessinsider.com/news/stocks/steve-cohen-ken-griffin-invest-3-billion-gamestop-short-seller-2021-1-1030003305">which received a $2.75 billion investment</a> from Steve Cohen's Point72 and Ken Griffin's Citadel to help it weather the losses from a short position in GameStop.</p><p>Shares of GameStop were up as much as 32% on Tuesday.</p><p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/stock-picks-to-buy-below-pre-pandemic-levels-goldman-sachs-2021-1'utm_source=markets&utm_medium=ingest" target="_blank" rel="noopener">GOLDMAN SACHS: These 22 stocks still haven't recovered to pre-pandemic levels - and are set to explode amid higher earnings in 2021 as the economy recovers</a></em></p><p><img src="https://static4.businessinsider.com/image/601046106dfbe10018e00005-588/chamathtweet.JPG" border="0" alt="chamathtweet.JPG" data-mce-source="Twitter"></p><p><a href="https://markets.businessinsider.com/news/stocks/chamath-palihapitiya-gamestop-investment-buys-115-call-options-reddit-wallstreetbets-2021-1-1030005801#comments">Join the conversation about this story »</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/how-symphony-seas-worlds-largest-cruise-ship-deals-with-waste-2020-3">How waste is dealt with on the world's largest cruise ship</a></p>
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