Melvin Capital began 2021 with a whopping $12.5 billion in assets prior to retail investors from Reddit spawn the platform to drop billions on its GameStop short positions.
Melvin Capital has reportedly restructured its portfolio to be able to exit securities easily amid the SEC saying it would "closely review actions" in connection to the price volatility of certain stocks https://t.co/ywHkKzks8a — Cointelegraph (@Cointelegraph) January 31, 2021
The Wall Street Journal reported that Melvin Capital has a little over $8 billion in assets towards the end of January. This included a $2.75 billion investment from Citadel and Point72 Asset Management prior to this month.People acquainted with the firm asserted that this indicates a loss of 53%.
A client stated in a report claiming that, after the controversy involving the short-selling of GameStop stocks, Melvin has “massively de-risked” its investment portfolio. People who are familiar with the hedge fund said that Melvin is reorganizing its portfolio to enhance its capacity thereby quickly exiting shares.
Several of the key players associated with the GameStop short squeeze are experiencing uproar online. This is due to Robinhood, a platform with financial ties to Melvin and other investment tools limited trading for Gamestock amidst price spikes. Retail investors have cut off from financial tools supplied to key hedge funds triggered assertion of market manipulation.
The U.S. Securities and Exchange Commission revealed on Friday that it will be “closely [reviewing] actions taken by regulated entities,” in relation to the situation involving the r/WallStreetBets subreddit of Citadel, Melvin, Robinhood, and probably the retail investors. In Illinois and New York, in conjunction, Robinhood is facing two class-action lawsuits in federal courts.
As markets closed on Friday, the price of GameStop stock was $325, rising to 67 % in the past 24 hours.
Source: Cointelegraph | Image: Forbes