Martin Shkreli’s Freedom In Jeopardy After E*Trade Account Takes $40 Million Hit

Early last month, we asked a simple question when we learned that Martin Shkreli, pharma “bro” and the “most hated man in America” put up his $45 million E*Trade account to secure $5 million bail after he was arrested for fraud by federal authorities in December.

“Will Martin, like the E*Trade-ing Joe Campbell whose short position in KBIO blew up when Shkreli acquired more than half of the float back in November, start a GoFundMe page in the event his collapsing holdings leave him a few million short on the bail bond?”

Well as it turns out, we may just find out the answer to our question because as as Reuters reports, the value of Shkreli’s E*Trade account has fallen by some $40 million.

“At a hearing in federal court in Brooklyn, Assistant U.S. Attorney Winston Paes said the account contained mostly shares of KaloBios Pharmaceuticals,” Reuters wrote this afternoon.

That would be the same KaloBios that Shkreli sent through the roof when he acquired more than 50% of the outstanding shares last November. The stock promptly exploded on the news, crushing at least one retail investor who had built a $35,000 short position in the otherwise nonviable company.

Shkreli vowed to turn KaloBios around and the equity promptly soared to over $45 a share by the end of the month after he pulled the borrow, rubbing salt in the wounds of any and all shorts.

A month later, the company filed Chapter 11.

On Wednesday, Assistant U.S. Attorney Winston Paes told U.S. District Judge Kiyo Matsumoto that Shkreli may need to post new assets to secure his bond.

“There’s nothing like an indictment to affect the price of shares even if the shares have significant value,” Shkreli’s new lawyer, Benjamin Brafman quipped.

Nope, there sure isn’t. And there’s nothing like jacking the price of a drug up from $13.50 a pill to $750 a pill to ensure that no one – and we mean no one – will be willing to cut you some slack.

So we suppose there are three options for Shkreli at this point.

1) KaloBios suddenly rallies, lifting the value of his depleted account (so if you so choose, you can help keep Shkreli out of jail by snapping up some shares at the “bargain” basement price of $2)…