Economy

Melvin Capital says it has been short for GameStop since 2014

Melvin Capital says it has been short for GameStop since 2014

The hedge fund founder said in an advance transcript of his testimony before Congress published on Wednesday that Melvin Capital Management was betting against GameStop Corp. Since 2014 he still believes that online video game downloads will override the retailer’s business model.

Melvin Capital, Gabe Plotkin It lost more than 50% of its investment in January It accumulated losses from its short bets against GameStop and other companies. GameStop is promoted on WallStreetBets forum reddit And some other social media platforms, with rising stock prices, hurt the revenues of several high-profile companies including Point72, the asset manager of Steven A. Cohen, and Daniel Sundheim’s D1 Capital Partners.

The action on GameStop was boosted in part by an army of rising single traders urging each other on platforms like Reddit to buy stocks and options and squeeze Melvin, a particular target for posters. GameStop’s seemingly relentless march has also created what merchants describe as some kind of contagion effect. Managers lost confidence in their short positions and covered those bets while reducing their stakes in other companies to reduce the risk in their portfolios.

GameStop’s seemingly relentless march has also created what traders described as some kind of contagion effect, as managers lost confidence in their short positions and covered those bets. These managers also reduced their stakes in other companies to reduce risks in their portfolios.

The episode raised questions about market integrity and took off Federal Investigations into Potential Market Manipulation. Plaintiffs have called information from brokers such as Robinhood Markets Inc. Online Mediation Many individual investors are accustomed to trading GameStop and other stocks.

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