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takyon [soylentnews.org] writes:

Melvin Capital, hedge fund targeted by Reddit board, closes out of GameStop short position [cnbc.com]

Melvin Capital closed out its short position in GameStop on Tuesday afternoon after taking a huge loss, the hedge fund's manager told CNBC's Andrew Ross Sorkin.

GameStop, hedge funds' most-hated stock, was targeted by an army of retail investors who marshaled forces against short sellers in online chat rooms. In the Reddit forum "wallstreetbets" with more than 2 million subscribers, rookie investors encouraged each other to pile into GameStop's shares and call options, creating massive short squeezes in the stock.

CNBC could not confirm the amount of losses Melvin Capital took on the short position. Citadel and Point72 have infused close to $3 billion into Gabe Plotkin's hedge fund to shore up its finances. On Wednesday's "Squawk Box," Sorkin said Plotkin told him that speculation about a bankruptcy filing is false.

GameStop shares have soared more than 400% this week alone to $347.51 apiece, driving its January gains to 685%. The stock was worth just $6 four months ago.

Reddit's WallStreetBets is locked as AMC, GameStop stocks fall after-hours [cnet.com]

For the past week, Reddit's WallStreetBets community has been the center of an epic war [cnet.com] between large Wall Street investors and small scale social media betters [cnet.com]. Now, it's been locked, and spooked investors appear to be dumping their shares.

Shares of GameStop and AMC dropped dramatically in after-hours trading shortly after Reddit's community was made only viewable through an invite.

See also: Reddit traders cause Wall Street havoc by buying GameStop [thehill.com]
GameStop and Elon Musk send Reddit and Robinhood to the top of the App Store charts [9to5mac.com]
'Dumb Money' Is on GameStop, and It's Beating Wall Street at Its Own Game [nytimes.com] (archive [archive.org])

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