Melvin Capital sells out of Game. Stop Melvin Capital closed out its short position in Game. Stop on Tuesday afternoon after taking a huge loss, the hedge fund’s manager told CNBC’s Andrew Ross Sorkin.
It could’ve gone very differently New York (CNN Business) Melvin Capital, a premier Wall Street hedge fund entangled in the frenzy over Game. Stop ( GME), lost 53% in January, a source familiar with the matter told CNN Business. Melvin, a major short-seller of Game. Stop, bet that the company’s shares would drop.
The next thing we wanted the answer to was which hedge fund shorted gamestop?
Hedge fund Melvin Capital closed out its short position in videogame retailer Game. Stop Corp, CNBC reported Wednesday. Fund manager Gabe Plotkin told CNBC’s Andrew Ross Sorkin that the position was closed out Tuesday afternoon following a huge loss.
You may be thinking “Which hedge fund lost more than 50% in one month betting against GameStop?”
The firm exited its short position on Game. Stop earlier this year after sparring with day traders.
Hedge funds such as Citadel and Melvin Capital have lost billions of dollars, and fast. They’re shorting a stock that is no longer on the brink of bankruptcy.
Can gamestop go bankrupt?
A string of losses and massive revenue declines also cast doubt on Game. Stop’s ability to survive. However, while industry trends have pummeled Game. Stop stock, other opportunities in gaming may throw it a lifeline. Despite a tenuous outlook, Game. Stop is still unlikely to go bankrupt.
The recent boom to Game. Stop’s stock price is unrelated to its financial strength, but it may provide the company a chance to stave off bankruptcy. The recent boom of trading and resulting fluctuations of Game. Stop ‘s stock price could actually save the company from bankruptcy, according to one market analyst.
Why did ‘wallstreetbets’ push up the GameStop share price?
Members of the Reddit thread “wallstreetbets” decided to pile in to Game. Stop with the aim of pushing up the share price to inflict losses on short-sellers including Melvin Capital. Read more: Hedge funds and short-selling stock: How and why Gamestop shook the stock market.
A frequent question we ran across in our research was “Why is GameStop struggling?”.
, game Stop is struggling because streaming has become the cornerstone of the gaming experience. Bankruptcy is a stretch, but a buyout is possible. | Source: Shutterstock Game. Stop was, at one time, one of the premier names in gaming. Some say it still is.
Now it’s only a matter of time for Game. Stop to step up and raise capital so that they can innovate and provide more value back., game Stop is currently looking for ways to operate more efficiently. While the Reddit community was able to keep them from going bankrupt, the company as a whole will need to start pulling their end.
Is GameStop the world’s most shorted stock?
At the urging of investors like Burry, Game. Stop has bought back about $200 million in stock since 2019, lowering its shares outstanding by 38%. The repurchases, combined with massive hedge fund bets against Game. Stop as it suffers from declining in-store video game sales, meant it ended 2020 as one of the world’s most heavily shorted stocks.
This begs the query “How much did GameStop short sellers lose in 2018?”
By the end of January, analysts estimated Game. Stop short sellers had lost $19 billion in total. Melvin Capital closed out of its Game. Stop short position on January 27, and ended the month with $8 billion in assets under management, compared to the $12.5 billion it started the year with.
Did Melvin Capital close out of GameStop?
Melvin Capital closed out its short position in Game . Stop on Tuesday afternoon after taking a huge loss, the hedge fund’s manager told CNBC. CNBC could not confirm the amount of losses the firm took on the short position.