A number of high-profile hedge funds have already lost more than $5 billion so far this month, according to data from the financial-analytics firm S3 Partners. The higher the stock went, the greater the losses incurred by those that had previously bet against any price rises, as they were then forced to buy those shares back, whatever the cost. Members have spent the past three weeks bidding up GameStop, which has sent the shares skyrocketed more than 1,200% since Wall Street Bets first piled in on January 11. GameStop's shares have hit record highs and the swarm of retail investors behind the rally have cheered each other on, primarily within the popular Reddit forum Wall Street Bets, which by Thursday, had around 3.5 million members. CNN Sans ™ & © 2016 Cable News Network.Video-game retailer GameStop has dominated the headlines this week after its shares trebled in value in just three days this week, in a buying frenzy fueled by individual traders that have forced some of Wall Street's prominent hedge funds to close their bearish bets against the company with hefty losses. Market holidays and trading hours provided by Copp Clark Limited. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC and/or its affiliates. Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. Instead of billions, however, Burry looks like he may have made about 100 million on. US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. At GameStop’s Reddit-fueled high of 483, Burry’s maximum holding could have been worth over 1.5 billion. Your CNN account Log in to your CNN account Hedge fund manager Senvest Management, which had previously bought a five percent stake in GameStop when shares were at 10, made a profit of 700 million. The frustration from Robinhood users was soon followed by a class-action lawsuit against the stock-trading app for its decision of restricting trading of stocks like GameStop. The move was followed by an onslaught of backlash from individual investors, such as those from Reddit, who felt Robinhood was giving into pressures from Wall Street and the requests of hedge fund managers. Melvin found itself at the heart of the GameStop saga after Robinhood suspended trading of the stock and several others Thursday. “Use of leverage is at the lowest level since Melvin Capital’s inception in 2014.” “The fund’s portfolio liquidity is strong,” the source said. Last week, Citadel, a hedge fund owned by billionaire Ken Griffin, provided the firm with a more-than-$2-billion bailout. It ended the month with more than $8 billion after receiving commitments from current investors for more capital in the final days of the month, the source said. Melvin Capital was founded by Gabe Plotkin, and it started the year with roughly $12.5 billion in assets. The Wall Street Journal first reported Melvin’s losses. At one point, GameStop had more short interest than shares on the market. The Reddit group specifically targeted stocks that were heavily shorted. Hedge funds like Melvin with huge short positions in GameStop and other stocks targeted by WallStreetBets got burned. That set off a fury on Reddit, namely subreddit WallStreetBets, which catapulted GameStop’s stock more than 1,600%. But, on January 11, GameStop announced new board members who could help it with digital sales. The hedge fund Citadel which is a separate company from Citadel Securities but was founded by the same person, Ken Griffin has also been involved in the current dustup over GameStop. Melvin, a major short-seller of GameStop, bet that the company’s shares would drop. These funds are owned by groups of big investors pooling the savings of millions of unionized workers, such as teachers and firefighters, who count on hedge funds to grow and protect their nest eggs. (GME), lost 53% in January, a source familiar with the matter told CNN Business. Melvin Capital, a premier Wall Street hedge fund entangled in the frenzy over GameStop
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |