Hedge fund Melvin sustains 53% loss after Reddit onslaught

[LiberalArkie]

1/31/2021, 4:10 PM

Melvin Capital, the hedge fund that was wrongfooted by retail traders who drove up shares in GameStop and other companies it had bet against, lost 53 percent in January, according to people familiar with the firm’s results.

The New York-based hedge fund sustained a $4.5 billion fall in its assets from the end of last year to $8 billion, even after a $2.75 billion cash injection from Steve Cohen’s Point72 Asset Management and Ken Griffin’s Citadel.

Melvin became the target of retail traders who coordinated to drive up the share price of GameStop on online message boards such as Reddit, after the firm disclosed its bet against the company in regulatory filings.

The short squeeze on Melvin has been taken by some as a victory over a broken system they see as benefiting the country’s elite, and the trading strategies used to pressure hedge funds have shot from the fringes of the internet to the heart of the zeitgeist.

Snip

https://arstechnica.com/gadgets/2021/01/hedge-fund-melvin-sustains-53-loss-after-reddit-onslaught/

[rpannier]

1. Sad they didn't lose more assets

Say... 100%

[Demsrule86]

3. I wonder if the other Hedge Fund sharks will short this worthless company that creates nothing

but misery.

[Celerity]

10. From what I saw reported on MSNBC and CNN, some of the other hedge funds helped bail it out.

So many interlocks of corruption and conflicts of interest involved at every level as well, plus billionaires like the scum Cooperman whingeing on about how unfair it is to the poor hedge funds and trying to fob off blame on (I paraphrase here) the COVID-19 relief cheques funding slackers who should be out working. What a true POS.

[uncle ray]

14. why stop there? 130%.

[Demsrule86]

2. Good!

Poor Baby...all those companies some that could have been saved that you killed all those folks out of work thanks to you...

[Loki Liesmith]

4. I don't see why so many oppose hedge funds

I don’t feel bad for them either but they are a legitimate market mechanism for hedging risk.

If they get caught with their pants down it’s bc they failed to accurately model risk.

[Skittles]

5. they thrive off of misery

that is enough to hate them

[ret5hd]

7. Things like this:

https://www.google.com/amp/s/www.wsj.com/amp/articles/who-killed-toys-r-us-hint-it-wasnt-only-amazon-1535034401

[Demsrule86]

8. They are scum and create nothing. They bet on stocks going up and down...bottom feeders.

And they make so much money doing absolutely nothing positive.

[Drahthaardogs]

11. If you think gambling on borrowed stocks and

Manipulation of the market is legitimate, I guess that’s a legitimate position

[uncle ray]

15. the problem is, they're being bailed out and manipulating the market to save their asses.

trading apps are limiting retail trader's buys to protect the hedge funds.

[BadgerKid]

6. AIUI, Melvin wasn't the target per se.

But rather hedge funds who collectively have shorted more shares than are out in the market in the first place.

For background, read up on naked short selling or failure to deliver, for example at Investopedia.

[calguy]

9. When all the hype on Gamestop is over....

and all the new "investors" tap out their funds and start to see their cash go down the drain ...they'll start selling as fast as they can.. the hedge funds will be right back shorting this shitty company and make back all their money and more. These guys have been around a long time and they'll still be here when all the new buyers have been wiped out.

[VarryOn]

13. After this all started making headlines, I discovered I had 300 shares...

I had forgotten I had. Over the years, I had bought bought and sold it a few times in my day trading days during a period of unemployment. Being a small investor, I usually don't buy large quantities of shares each time I buy, so my portfolio consists of a lot of different stocks and mutual funds.

In May, 2019, I paid $8.61 per share for GME. I sold them last Tuesday $122.12. I was ecstatic about my luck...that is until the next day when the jump to over $350 happened.

But, I'm glad to have done so well notwitshtanding the reason for the big jump in price.

There's no telling when it will crash back to reality, and when it does, it'll happen fast and many wont be able to get their trades off in time.

[calguy]

17. Congratulations on your windfall

You did the right thing taking the money and running. So it went up over $300 the next day? A who cares? It could have just as easily gone down to $50, then $20......you had no way of knowing. What you do know is you have humongous profits.
In. The. Bank.
When the inevitable crash comes, you can watch it with a smile on your face knowing you are one of the winners.

[Wounded Bear]

12. Aww, hedgie got a wedgie...

[Initech]

16. Where is the world's tiniest violin when you need it?