Bill Gross lost sleep and money betting against 'nonsense' GameStop and AMC meme stocks — but now he's up as much as $20 million

• Bill Gross told the FT he lost money and sleep betting against GameStop and AMC, but now feels vindicated.
• The Pimco co-founder estimates he's up at least $15 million now, after popular meme stocks slumped.

Billionaire investor Bill Gross has said he lost money and sleep betting against GameStop and AMC, but he now feels vindicated after a slide in the popular meme stocks.

The Pimco co-founder told the Financial Times he initially lost enough money to keep him up at night, after he was forced to close some of his positions.

But after persisting with his short strategy, fueled by his skepticism about the stocks, he's now ahead of the game.

"Maybe I'm an old fart ... but in total, I'm up maybe $15 million to $20 million," he told the FT in an interview published Saturday.

Over the past year and a half, Gross has stuck to his strategy of using options to short meme stocks — that is, to bet that their price will fall.

In January last year, amateur traders on the WallStreetBets Reddit forum plowed money into video-game retailer GameStop and movie-theater chain AMC, driving massive rallies in the stocks.

Gross was down between $10 million and $15 million at one point during that meme stock frenzy, he said in March last year.

"I was losing millions of dollars, and that's not a good feeling when you go to bed," he said on a Citywire Selector podcast at the time.

The veteran investor is now millions of dollars to the good after holding onto his short strategy, as the price of meme stocks has plunged. On Friday, GameStop shares were down more than 80% from a high of $483 hit during the January 2021 rally, for example.

Gross became known as the "Bond King" after building investment company Pimco into a fixed-income leader. The 77-year-old investor retired three years ago after a role at Janus Henderson, and now manages his own money.

In the FT interview, Gross criticized the Federal Reserve for keeping interest rates low for several years. He suggested low returns on savings prompted retail investors to look elsewhere — and that has heightened the appeal of meme stocks and crypto assets.

"It destroys the savings function," he said. "Meme stocks and NFTs, all of this nonsense in my mind has developed from the inability to earn a decent return in your 401k."

Read more: A 30-year-old crypto podcaster turned VC received $100 million in backing from the likes of a16z founders and the Winklevoss twins. He shares the 3-part NFT investing strategy that helped win them over — and 4 projects to watch