How much did hedge funds lose on GameStop?

Hedge funds and others that bet against GameStop have collectively lost more than $5bn, according to data analytics company S3.

What hedge fund was shorting GameStop?

White Square was one of numerous funds to take on double-digit losses on the short part of this model in January, as armies of coordinated retail traders targeted stocks—including AMC Entertainment and GameStop—that mainstream financial institutions had bet against, known as short selling.

Why is GameStop spiking?

There is no company-specific reason for GameStop’s spike, and its surge has been echoed by the likes of AMC Entertainment and BlackBerry – other so-called meme stocks that rose earlier in the year.

How much did hedge funds lose in 2021?

The potential losses are a setback in what has so far been a steady year for performance. The average hedge fund is up 11.4% in the first 10 months of 2021, data from HedgeFund Research (HFR) showed. That compares to 11.8% last year and 10.5% in 2019.

What happened Melvin capital?

Gabe Plotkin’s Melvin Capital Management ended the first half of 2021 down 46% as the hedge fund struggled to bounce back from a vicious attack by Reddit traders on its short positions. The firm, which plunged in January as its bearish bets on companies including GameStop Corp. and AMC Entertainment Holdings Inc.

Are short squeezes legal?

Short squeezes are illegal. Any brokerage that knowingly allowed a short squeeze to continue without taking action, could have potentially massive legal liabilities.

Is the GameStop short squeeze illegal?

The idea behind this is to quickly lock-in profits to get an immediate return on their investment. While this practice is not illegal, nor is it unethical, there’s an inherent amount of risk involved with this approach. For one thing, day traders usually buy stock using borrowed funds.

Is it too late to buy GameStop stock?

You can buy GameStop shares at any time.

Why did GameStop stock explode?

Volatility continued to swirl around GameStop Friday as shares in the video game retailer jumped more than 54% in early trading amid renewed enthusiasm on Reddit and the lifting of trade restrictions by Robinhood.

Why did GameStop stock go up January 2021?

In the case of GameStop, a deliberate campaign was arranged via social media (particularly Reddit) for individuals to purchase GameStop shares, thus driving the price higher. As a result, some estimates place the loss to institutional investors in January 2021 alone at around 20 billion U.S. dollars.