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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

#171

Post by nl »

nprz wrote: post #114
dataflow wrote: post #101

Earlier quoted context omitted.

I wouldn't call it a conspiracy theory or call this out as an example of Occam's razor. > Collectively they can, and did, cause this.. no need to invent other actors to explain it. The thing is, people imagine this requires a lot of capital to pull off. How did WSB get so many people to invest so much into GME as to hit a hedge fund so hard? Do so many people really have that much money just to throw away? There is a…

I mean the WSB user count has grown from 2.2m on Monday to now 7.5m. If 5 million of those users all bought $100 worth of GME that's half a billion, if they bought $1000, that's 5 billion.

> the WSB user count has grown from 2.2m on Monday to now 7.5m. If 5 million of those users all...

Is 5/7.5M users of any forum did anything it would be some kind of record level conversion, let alone speculating $100.

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

#172

Post by addandsubtract »

Uehreka wrote: post #123
motohagiography wrote: post #58

%53, so far. The problem with the short interest being %140 is that the notional value of shares to cover that extra %40 is in fact, infinite. It's literally everything those funds can sell, borrow, and get bailed out to cover their position. My prediction last week was this has system wide implications, and I'm thinking 1. the Fed will intervene, leverage Robinhood's EULA, and buy out everyone's shares at a price th…

I’m far from an expert in this, but this seems wrong. My understanding is that even though shorts can in theory have “infinite downside”, in practice the short-sellers have to bail if they can’t post enough collateral to buy back the stock. And the 140% isn’t some “impossible fraction” thing, it just means that if there were 10 million shares before, well then now there are technically 24 million, and the short-selle…

Aren't 140% of 10 million shares 14 million?

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

#173

Post by qeternity »

bluGill wrote: post #103
fractionalhare wrote: post #64

Earlier quoted context omitted.

With respect, you haven't thought this through. Given there is "so much riding on this", why do you think a hedge fund would concoct a nefarious, extremely uncertain scheme to get people to think they closed instead of actually closing? You agree they're motivated by money, right? They would have lost literally all their money, even with the additional investment, if they were still in when GME soared to $400. They w…

Because closing their position is not what any sane shorter wants to do. The bottom line of GameStop sucks baddly. Anyone who can add to their shorts stands to make a fortune in a few months after this all calms down. Though they might have seen what was happening and exited at 50 to reenter at 300. That would be incredible foresight.

Why do you think short squeezes happen? It’s not because shorts are being insane and covering. They are literally forced to. You have buying for reasons that aren’t commercial and that’s why short squeezes are so bloody.

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

#174

Post by brmm »

dataflow wrote: post #157
Mo3 wrote: post #155

Earlier quoted context omitted.

No, it's not. According to S3 data they've not. They're running a massive smear compaign to convince the public otherwise.

> According to S3 data they've not. If you have a link you'd be able to share that'd be awesome.

https://isthesqueezesquoze.com/

See the links near bottom of the page, some are subscriptions though

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

#175

Post by Izkata »

PurpleFoxy wrote: post #142
gambiting wrote: post #87

Earlier quoted context omitted.

In some languages you put the percentage sign at the front - like, in Turkish for instance[0]. I mean, it's not that weird. It's how currency symbols move to either front or behind of a number. Why is it $300 but 300zł? [0] https://forum.wordreference.com/threads/percent-sign-positio...

It’s generally said that the dollar sign is in front to stop people adding extra numbers to written cheques. Since the end of the number is finished with .00 and the start is $ there is no room to add anything extra.

All the checks I've seen have a box for the number and the $ printed outside the box. There wouldn't be room even if there was no $.

Also that's why the amount is written in words below it, a double-entry to prevent one of the two locations from being modified.

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

#176

Post by kortilla »

mattkrause wrote: post #90
f430 wrote: post #42

It's really strange. Why would they openly announce that they have closed shorts and that they are sustaining damage so publicly? My theory is that they are not only doubling down but quadrupling down everytime the stock shoots up. Gamestop has no fundamentals going for it, take a look at its other competitors in the industry, they are all gone. Neither do cases for AMC (who themselves acknowledged and WARNED investo…

Was AMC in trouble before the pandemic?

Yeah, it was like $6 a share at the start of 2020 down from $20 a year before that.

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

#177

Post by ClumsyPilot »

PurpleFoxy wrote: post #26
viraptor wrote: post #19

Earlier quoted context omitted.

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)

It is somewhat important to describe how these people are not acting rationally or individually and how these internet groups can group together to have very powerful and unusual effects.

"groups can group together to have very powerful and unusual effects."

Yes, like you know start political parties, fight for independance, or whatever. I fail to see why it continues to facinate people that WSB is just as valid an organisation as Greenpeace or IBM.

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

#178

Post by SpicyLemonZest »

belltaco wrote: post #168
SpicyLemonZest wrote: post #132

Earlier quoted context omitted.

Over 700 million shares were traded last week, so even if every WSB user bought 10 shares, that wouldn't account for close to a majority of the activity.

Volume is meaningless, as the same share might be traded back and forth several times, e.g HFT or order flow buyers flipping stocks within microseconds.

Would HFT traders flip a stock 10 times among each other just to fulfill a single Redditor's buy order? (Honest question, I don't know enough about standard HFT practices to confidently guess.)

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

#179

Post by [deleted] »

bluGill wrote: post #110
icedchai wrote: post #75

Earlier quoted context omitted.

It seems less risky to buy puts, not short directly. I wouldn’t want to be short if this goes up another 10x, even briefly. It will go back down but you might get wiped out first.

The problem with puts is they can expire before this calms down. If you can get a short in and not get a margin call this is the opportunity of a lifetime. Only the biggest players dare risk it though.

[deleted]

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

#180

Post by gonzo41 »

Moodles wrote: post #16
saurik wrote: post #13

Earlier quoted context omitted.

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.

I know it's not illegal, but how is being that big and lying, not market manipulation?
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