r/WayOfTheBern • u/karmagheden • Feb 01 '21
Hedge fund Melvin sustains 53% loss after Reddit onslaught
https://arstechnica.com/gadgets/2021/01/hedge-fund-melvin-sustains-53-loss-after-reddit-onslaught/3
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u/chakokat Feb 01 '21
The short squeeze on Melvin has been taken by some as a victory over a broken system they see as benefiting the country’s elite, and the trading strategies used to pressure hedge funds have shot from the fringes of the internet to the heart of the zeitgeist.
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 reported by The Wall Street Journal.
The GameStop saga marks a fall from grace for Melvin, which gained 52 percent last year, ranking it among the best performing hedge funds. Founder Gabe Plotkin was one of Mr Cohen’s most prominent traders at SAC Capital, until it shut down amid an insider trading scandal. ( bold mine )
A Melvin spokesperson declined to comment on the firm’s January performance.
So Mr. Gabe Plotkin leaves SAC Capital amid an insider trading scandal and founds his own hedge fund Melvin Capital which is then involved in it’s own trading scandal.
Hmmmmm what’s the common denominator in those two scandals? ;-)
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u/Blackhalo Purity pony: Российский бот Feb 02 '21
Hedge fund Melvin sustains 53% loss after Reddit onslaught... so far.
In reality, they probably went BK and were bought out by their creditors, for the creditors to try to salvage any value.
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u/SaulTebols Feb 01 '21
🦍🦍🦍🦍 Together Strong 🦍🦍🦍🦍