Negative Impact of the Gamestop Short!

Details about the negative impact of purchases organized by individual investors in GameStop stocks on funds taking short-selling positions in this stock began to emerge. Melvin Capital's loss exceeded 50 percent in January.

Last week, a group of small investors organizing on the social platform Reddit and pumped GameStop shares, which had a great impact on Wall Street. As a new week begins, the balance sheet of the loss has been determined. It was revealed that the loss of the hedge fund Melvin Capital, which took a position by short-selling the GameStop shares, which was loaded by individual investors at once, was 53 percent in January. According to the news in Bloomberg, the hedge fund has remained at the lowest leverage level since its establishment in 2014. Founded by Gabe Plotkin, the fund has $ 8 billion in management, including the funds it received from Citadel LLC and Point72 funds during the GameStop event. During the GameStop incident that confused Wall Street, the trading platform Robinhood, which had difficulty executing commands and used bank credit lines and raised funds from its shareholders, limited its transaction restrictions to eight shares. The list of restrictions included stocks flooded by individual investors such as AMC Entertainment and BlackBerry. After the restriction decision, GameStop stock closed yesterday with a 44 percent decrease after a 5-day increase, and the company's market value lost about $ 11 billion. The daily loss in the stock increased up to 68 percent at one interface. While transactions were stopped 19 times due to high volatility, the record-breaking transaction volume dropped to about 55 million on Friday with 197 million. While the sales were reflected in not so good shares such as AMC, Blackberry, American Airlines, Express, Koss and Nokia; Robinhood customers took legal action against the platform.       This article has contributions of Bloomberg HT.