Melvin Capital closed its quick position in GameStop Inc. on Tuesday afternoon after taking a huge loss, hedge fund head Andrew Ross Sorkin told CNBC.
The hedge fund was in the process of suspending its position in GameStop after losing more than 2 million subscribers, he said. On Wallstreetbets, a Reddit discussion board with more than 2 million subscribers, new traders pounced on GameStop shares and picked names, quickly crowding out the stock, taking inspiration from each other.
Citadel and Point72 raised their capital by injecting nearly $3 billion into Gabe Plotkin’s hedge fund. On Wednesday’s Squawk Box, Sorkin said Plotkin told him to suggest that some chapters had been poorly submitted.
GameStop’s stock price soared more than 400 percent to $347.51 last week, giving it a 685 percent stake in January. Over the past four months, shares have been valued at just $6.
The online game retailer’s stock price rose another 134 percent on Wednesday, bringing the company’s market value to $24 billion.
GameStop alone was the most traded company on the U.S. stock market Tuesday, surpassing Tesla and Apple despite market caps of 81 and 233, respectively, according to Jim Reed, a strategist at the German Financial Institute.
Amid GameStop’s explosive growth, the fast-selling company has so far posted stock losses of more than $5 billion, including a $917 million shortfall on Monday and $1.6 billion on Friday, according to S3 Companions.
I don’t know, I don’t know, I don’t know, I don’t know, I don’t know, I don’t know,” he said. He previously said GameStop would “soon” fall back to $20 a share, citing attacks from an “angry mob” that owns shares of the company.
In a deleted tweet Tuesday, investor Michael Berry said GameStop’s trading was “unnatural, senseless and damaging” and required “regulatory mandates and action.” Berry made his name betting on the housing bubble and is featured in Michael Lewis’ e-book, The Big Short.