Melvin Capital, hedge fund targeted by Reddit board, closes out of GameStop short position
Amid GameStop’s explosive rally, short sellers have accumulated losses of more than $5 billion year to date in the stock, including a loss of $917 million on Monday and $1.6 billion on Friday, according to data from S3 Partners.
Short seller Andrew Left of Citron Research said Wednesday he has covered the majority of his short position in GameStop at a loss. He previously said GameStop will fall back to $20 a share “fast” and called out attacks from the “angry mob” that owns the stock.
Investor Michael Burry said in a now-deleted tweet Tuesday that trading in GameStop is “unnatural, insane, and dangerous” and there should be “legal and regulatory repercussions.” Burry shot to fame by betting against the housing bubble and was featured in Michael Lewis’ book “The Big Short.”
The Securities and Exchange Commission declined to comment.
Social Capital’s Chamath Palihapitiya is among those who jumped into the stock, saying in a Tuesday tweet that he bought GameStop call options betting the stock will go higher. His tweet seemed to intensify the rally in the previous session. The stock ended the day 92% higher at $147.98.
GameStop stock halts trading after Reddit drama
The hype generated by r/wallstreetbets helped create what’s known as a “short squeeze” on GameStop’s stock. A short squeeze works like this: some investors, known as shorts, essentially bet that a company’s stock will fall. These investors borrow stock from other investors and sell it — with plans to buy it back when the prices fall and then return it to the original owner. However, the problem with shorting is that one’s losses are theoretically infinite; if a stock begins an upward run, some short sellers will abandon their short and buy shares at the higher price to return. This, in turn, makes the stock go higher, burning any other shorts who remain in the stock, some of whom may, in turn, choose to cover their own shorts.
GameStop is the most-shorted stock in the market, CNBC said, citing FactSet. More than 138 percent of its shares are sold short — making it a prime target for a short squeeze. GameStop’s Reddit-related surge triggered a circuit breaker stoppage when it rose 69 percent (nice) on Friday around 12:45PM ET.
Citron said Friday it would no longer comment on the GameStop stock because of “the angry mob who owns this stock.” Citron Research editor Andrew Left wrote in a note to readers that the backlash had included criminal activity he planned to report to the Securities and Exchange Commission, which included harassment of minor children as well as financial crimes.
Amid GameStop’s explosive rally, short sellers have accumulated losses of more than $5 billion year to date in the stock, including a loss of $917 million on Monday and $1.6 billion on Friday, according to data from S3 Partners.
Short seller Andrew Left of Citron Research said Wednesday he has covered the majority of his short position in GameStop at a loss. He previously said GameStop will fall back to $20 a share “fast” and called out attacks from the “angry mob” that owns the stock.
Investor Michael Burry said in a now-deleted tweet Tuesday that trading in GameStop is “unnatural, insane, and dangerous” and there should be “legal and regulatory repercussions.” Burry shot to fame by betting against the housing bubble and was featured in Michael Lewis’ book “The Big Short.”
The Securities and Exchange Commission declined to comment.
Social Capital’s Chamath Palihapitiya is among those who jumped into the stock, saying in a Tuesday tweet that he bought GameStop call options betting the stock will go higher. His tweet seemed to intensify the rally in the previous session. The stock ended the day 92% higher at $147.98.
GameStop stock halts trading after Reddit drama
The hype generated by r/wallstreetbets helped create what’s known as a “short squeeze” on GameStop’s stock. A short squeeze works like this: some investors, known as shorts, essentially bet that a company’s stock will fall. These investors borrow stock from other investors and sell it — with plans to buy it back when the prices fall and then return it to the original owner. However, the problem with shorting is that one’s losses are theoretically infinite; if a stock begins an upward run, some short sellers will abandon their short and buy shares at the higher price to return. This, in turn, makes the stock go higher, burning any other shorts who remain in the stock, some of whom may, in turn, choose to cover their own shorts.
GameStop is the most-shorted stock in the market, CNBC said, citing FactSet. More than 138 percent of its shares are sold short — making it a prime target for a short squeeze. GameStop’s Reddit-related surge triggered a circuit breaker stoppage when it rose 69 percent (nice) on Friday around 12:45PM ET.
Citron said Friday it would no longer comment on the GameStop stock because of “the angry mob who owns this stock.” Citron Research editor Andrew Left wrote in a note to readers that the backlash had included criminal activity he planned to report to the Securities and Exchange Commission, which included harassment of minor children as well as financial crimes.
I know wasn't that about the dumbest thing you have heard at least today?
