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Hedge fund Melvin sustains 53% loss after Reddit onslaught

arstechnica.com

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Re: Hedge fund Melvin sustains 53% loss after Reddit onslaught

#11

Post by Judgmentality »

wrkronmiller wrote: post #5

> On Wednesday Melvin said it had exited its bet against GameStop and repositioned its portfolio. The firm moved to reduce risk in its investments following a turbulent start to January when it lost 30 percent in the first three weeks. Melvin’s leverage ratio is at the lowest it has been since the firm’s founding in 2014, said a source familiar with the firm. The news of Melvin’s January performance was first reporte…

The general assumption on WSB is that Melvin Capital is lying and that they haven't closed their positions.

I haven't seen any evidence to suggest they've closed it, and have seen circumstantial evidence suggesting they have not. You don't spend money on ads saying "we no longer have a financial stake in this stock" unless you, you know, have a financial stake in this stock.

Considering this is a hedge fund, I just assume they're lying because, you know, it's a fucking hedge fund.

EDIT: People are claiming CNBC bought ads, not Melvin Capital. https://i.redd.it/8vxraurkcce61.png

Re: Hedge fund Melvin sustains 53% loss after Reddit onslaught

#12

Post by MichaelApproved »

Moodles wrote: post #9
wrkronmiller wrote: post #5

> On Wednesday Melvin said it had exited its bet against GameStop and repositioned its portfolio. The firm moved to reduce risk in its investments following a turbulent start to January when it lost 30 percent in the first three weeks. Melvin’s leverage ratio is at the lowest it has been since the firm’s founding in 2014, said a source familiar with the firm. The news of Melvin’s January performance was first reporte…

A better question is: If Melvin made a huge short position and is now finally out of it, why would they bother telling everyone? ;-)

So investors in Melvin won’t abandon them. They want to reassure their own investors that the damage is done and they’re out.

Re: Hedge fund Melvin sustains 53% loss after Reddit onslaught

#13

Post by saurik »

Moodles wrote: post #9
wrkronmiller wrote: post #5

> On Wednesday Melvin said it had exited its bet against GameStop and repositioned its portfolio. The firm moved to reduce risk in its investments following a turbulent start to January when it lost 30 percent in the first three weeks. Melvin’s leverage ratio is at the lowest it has been since the firm’s founding in 2014, said a source familiar with the firm. The news of Melvin’s January performance was first reporte…

A better question is: If Melvin made a huge short position and is now finally out of it, why would they bother telling everyone? ;-)

Maybe so investors can evaluate the current status of their hedge fund without thinking there is some massive looming instability about to hit them?

Re: Hedge fund Melvin sustains 53% loss after Reddit onslaught

#14

Post by newacct583 »

wrkronmiller wrote: post #5

> On Wednesday Melvin said it had exited its bet against GameStop and repositioned its portfolio. The firm moved to reduce risk in its investments following a turbulent start to January when it lost 30 percent in the first three weeks. Melvin’s leverage ratio is at the lowest it has been since the firm’s founding in 2014, said a source familiar with the firm. The news of Melvin’s January performance was first reporte…

The stock is currently around $300, up by a factor of five from last week and much more than that over its historical base. The question should be who isn't shorting GME, not leading questions about a conspiracy theory as to whether or not Melvin actually closed its shorts or not.

I mean, I haven't shorted GME personally. But I've absolutely joked with friends that it's an obvious play. Maybe I should.

Re: Hedge fund Melvin sustains 53% loss after Reddit onslaught

#16

Post by Moodles »

saurik wrote: post #13
Moodles wrote: post #9

Earlier quoted context omitted.

A better question is: If Melvin made a huge short position and is now finally out of it, why would they bother telling everyone? ;-)

Maybe so investors can evaluate the current status of their hedge fund without thinking there is some massive looming instability about to hit them?

Or, maybe they're lying to discourage more calls? In any case, their best strategy is to claim they're out of the short position so really them saying so is useless information.

Re: Hedge fund Melvin sustains 53% loss after Reddit onslaught

#17

Post by MichaelApproved »

grecy wrote: post #10

> On Wednesday Melvin said it had exited its bet against GameStop and repositioned its portfolio If they really had exited, why would they bother telling anyone? > A Melvin spokesperson declined to comment on the firm’s January performance Hmmmm. They won't talk about performance, but they're very keen to convince everyone they've exited their short position. This reads like yet another press release that all the maj…

> If they really had exited, why would they bother telling anyone?

They have their own customers and reputation to maintain. They’re trying to let their customers know that the damage is done and they’re out.

They’re trying to stop their customers from abandoning them.

Re: Hedge fund Melvin sustains 53% loss after Reddit onslaught

#18

Post by Tenoke »

wrkronmiller wrote: post #5

> On Wednesday Melvin said it had exited its bet against GameStop and repositioned its portfolio. The firm moved to reduce risk in its investments following a turbulent start to January when it lost 30 percent in the first three weeks. Melvin’s leverage ratio is at the lowest it has been since the firm’s founding in 2014, said a source familiar with the firm. The news of Melvin’s January performance was first reporte…

Likely just new shorts from a variety of places. I've seen plenty of people opening shorts with the expectations that WSB's play will blow in their face eventually.

Re: Hedge fund Melvin sustains 53% loss after Reddit onslaught

#19

Post by viraptor »

PurpleFoxy wrote: post #8

The best part about this whole situation is news companies having to translate crude reddit humour and logic in to something old people can understand. Seeing them trying to explain why billions of dollars move because of people who refer to themselves as retards who want to earn money to buy chicken tenders.

Does the Reddit part matter? It seems to be meta humour around completely risky but reasonable behaviour. You can explain pretty much everything about it in standard market terms. Mentioning the memes and crude humour is just getting into drama. (And completely optional)

Re: Hedge fund Melvin sustains 53% loss after Reddit onslaught

#20

Post by nickysielicki »

sdfhbdf wrote: post #6

Were all the shorts actually covered? There seemed to have been a lot of contradictory information over the weekend.

The shorts, from Melvin and others, have mostly been covered, leaving a lot of people holding bags.

https://twitter.com/ihors3/status/1356018482471718916

https://s3partners.com/Exclusive.html?utm_source=twitter&utm...

This is not some hedgefund guy trying to spread FUD, he's been pretty consistent in his reporting on this over the past week.

ie: this post on Thursday https://www.zerohedge.com/markets/we-have-some-bad-news-game...

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