A trader named Joe Campbell has turned to a charity website to beg for a bailout after a stock trade blew up in his face. Now, he’s looking at liquidating his 401(k) account and his wife’s to pay back his brokerage.
According to
Campbell’s account on GoFundMe.com, a website that helps people plead for donations, he sold short the shares in biotechnology company KaloBios the night before the stock jumped.
A short sale happens when a trader borrows a stock from a brokerage and sells it. The trade is profitable if the stock declines and the trader buys it back for a lower price. But theoretically, the losses can be limitless if the price climbs skyward.
Unfortunately for Campbell, KaloBios surged overnight, turning the $37,000 in his E-Trade account into a $106,445 black hole.
“I was holding KBIO short overnight for what I thought was a nice $2.00 fade coming,” he said. “At the close of the bell I saw the quote montage clear out and figured today there was no action after hours in the stock. So I went to my office for a long meeting. I got out of the meeting and saw a message from one of my buddy’s, he asked if I was ok since I was short KBIO.”
KaloBios jumped as much as 800 percent in extended trading after Turing Pharmaceuticals CEO Martin Shkreli bought a majority position in the ailing biotech. Last week, KaloBios had said it was going out of business as its cash dwindled while researching cancer drugs.
Shkreli made headlines earlier this year after buying the rights to a drug used to treat AIDS patients, and then jacking up the price.
Campbell said he called E-Trade to cover the short sale, and got out at $18.50 a share. He also said he was unaware that he could lose more money than he had in his account, and he mistakenly thought E-Trade would warn him of a soured trade.
The plea for help received a wide variety of responses, ranging from sympathetic to hostile to questioning the validity of his trades.
“Why are you asking for other people to help bail you out?” wrote one commentator. “I am sorry for your loss but asking others to pay for your stupidity is unethical at best.”
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