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Home / Business / Melvin Capital, a hedge fund targeted by the Reddit board of directors, closed GameStop’s short position on Tuesday

Melvin Capital, a hedge fund targeted by the Reddit board of directors, closed GameStop’s short position on Tuesday



Gabe Plotkin, the fund manager, told CNBC’s Andrew Ross Sorkin that Melvin Capital closed its GameStop network on Tuesday afternoon after suffering a huge loss. Short position.

Brick-and-mortar video game retailers are the most annoying stocks for hedge funds. They target a group of retail investors who oppose shorts in online chat rooms. In the “wallstreetbets” on the Reddit forum, there are more than 2 million subscribers, and rookie investors encourage each other, flooding each other with GameStop stocks and call options, causing a huge short squeeze on the name.

CNBC could not confirm the company̵

7;s short loss. Citadel and Point72 have injected nearly $3 billion into Melvin Capital to support the fund’s finances. Plotkin told Sorkin that the speculation that the company would file for bankruptcy was wrong.

This week alone, GameStop’s share price has more than doubled to nearly $150 per share, and its January increase reached 685%. The stock was worth only $6 four months ago.

GameStop shares rose about 60% in pre-market trading on Wednesday, after rising by more than 100% during the session.

According to data from S3 Partners, in GameStop’s explosive rebound, short sellers have accumulated more than $5 billion in stock losses to date, including a loss of $917 million on Monday and a loss of $1.6 billion on Friday.

Citron Research’s short seller Andrew Left (Andrew Left) said on Wednesday that he has made up most of his short positions in GameStop at a loss. He had previously stated that GameStop would “swiftly” drop to $20 per share and called on “angry mobs” who own the stock to launch an attack.

Investor Michael Burry said in a deleted tweet today that GameStop’s transaction is “unnatural, crazy, and dangerous” and should “have an impact on laws and regulations.” Burry gained fame for betting on a real estate bubble and became a feature in Michael Lewis’ book “The Big Short.”

The US Securities and Exchange Commission declined to comment.

Social Capital’s Chamath Palihapitiya became famous in one fell swoop, saying in a tweet on Tuesday that he had purchased GameStop call options and bet the stock would go higher. His tweets seemed to intensify the previous rally. The stock closed up 92% on the day to $147.98.

After the bell on Tuesday, Elon Musk commented on the mania on Twitter and linked to the “wallstreetbets” Reddit chat room. The CEO of Tesla tweeted to his 42 million fans “Gamestonk!” The comments seem to help propel GameStop’s stock to surge in extended trading on Tuesday.


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