7 ms·

The general assumption on WSB is that Melvin Capital is lying and that they haven't closed their positions. I haven't seen any evidence to suggest they've clos

The general assumption on WSB is that Melvin Capital is lying and that they haven't closed their positions. I haven't seen any evidence to suggest they've closed it, and have seen circumstantial evidence suggesting they have not. You don't spend money on ads saying "we no longer have a financial stake in this stock" unless you, you know, have a financial stake in this stock. Considering this is a hedge fund, I just assume they're lying because, you know, it's a fucking hedge fund. EDIT: People are claiming CNBC bought ads, not Melvin Capital. https://i.redd.it/8vxraurkcce61.png https://i.redd.it/8vxraurkcce61.png

ajross 6y ago
> You don't spend money on ads saying "we no longer have a financial stake in this stock" I don't think they did. The source of this meme seems to be a Twitter ad from CNBC that was teasing an interview with a quote to that effect. That's a CNBC ad selling their show, they don't take paid ads from their guests.
- Teever 6y ago
  > they don't take paid ads from their guests. How do you know this?
  - ajross 6y ago
    They sell journalism under the NBC brand. Is this a serious question? If CNBC was issuing paid advertisement like that it would be a much, much bigger story than a spike in a small cap retail stock.
    - elif 6y ago
      NBC has double the primetime product placement of it's next nearest competitor, fox. https://ufdc.ufl.edu/UF00101603/00001 https://ufdc.ufl.edu/UF00101603/00001
      - ajross 6y ago
        That's about fictional TV shows, not news.
        sschueller 6y ago
        Only a small segment during the 247 news station day is actually designated as news. Everything else is news entertainment which has different regulations.
        ajross 6y ago
        I still don't see what this has to do with the point above, which is that a promoted tweet from CNBC for one of their segments is clearly not a paid advertisement by the guest in the segment.
        elif 6y ago
        You don't think it is relevant in a discussion about deceptive paid primetime television marketing, that the company in question has the highest documented rate of deceptive paid primetime marketing?
        ajross 6y ago
        OK, you're just misunderstanding. "Primetime Television" is a marketing term that refers to the traditional TV network programming scheduled between 8-10pm. This is where they put the sitcoms and dramas and reality shows. And "Product Placement" refers not to advertising per se, but paid placement of retail products (e.g. cars, sodas, whatever) into the scenes in the fiction, or to appear as prizes, etc... It doesn't refer to news programming or other journalism, you just got confused. And I'll say it again: if NBC News, or any other major news media organization, ever got caught teasing a segment because of third party payment, it would be a much, much (seriously: much) bigger story than this minor nonsense about GameStop. They simply do not do what you are alleging, period.
- easton 6y ago
  This is not what happened, I don't know why people keep perpetuating it. The entire source of the "Melvin Capital has closed their positions" thing is an anchor on Squawk Box on Wednesday morning saying that he just got a call from Melvin's fund manager who said that Melvin closed. There hasn't been any other comment besides that one, which is why people think it may have been less than honest. https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddit-board-melvin-capital-closed-out-of-gamestop-short-position-tuesday.html https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddi...
  - fractionalhare 6y ago
    The more compelling reason to believe they didn't lie about it is because we haven't heard they went bankrupt yet. We probably would have heard that it happened by now, and they certainly would have been bankrupt if they didn't get out of GME in the $100s.
    - imtringued 6y ago
      If you are already out you don't have to tell anyone. You simply have exited the market and stopped caring.
  - jerry1979 6y ago
    Also, it seems like "close my position" could mean anything. Does that phrase have any specific legal meaning? For example, if I own 1 share of GME, then that is my "position". If I buy another share of GME, then I have a new position: 2 shares of GME. I "closed" my first position, and opened a new one.
nickysielicki 6y ago
The way that WSB has latched onto Melvin as their enemy is to their detriment. It was never about killing Melvin capital, or at least, it shouldn't have been. It ought to have been about the ridiculous short interest on the stock, regardless of who was funding it. Whether or not Melvin specifically has covered their shorts is irrelevant to how the short interest as a percentage of float has changed in the past week. https://twitter.com/ihors3 https://twitter.com/ihors3 is the source to pay attention to, and he's saying (within the past hour) that collectively, the shorts have been largely covered. It's going to be bloody tomorrow. ... Either that, or magical meme energy is going to defy reason once again. Who knows.
- loganfrederick 6y ago
  If the stock continues going up this week, it's that the "magical meme" energy is actually the momentum traders and various celebrities who want to keep the story going by putting more money into it. Of course, they are then likely to flip their positions for a profit before they tell their followers they've sold, leaving the fans holding the bag. Just at a more extended timeframe than you'd predict.
- alextheparrot 6y ago
  I think that post is representative of how only the market and time will actually flesh out this story. The GME holding party entrenches further because the graph is bad (Y Axis distortion) and the GME short party says the pressure has been alleviated.
- jonnyone 6y ago
  >defy reason once again. Nothing I've read about this hints that reason was ever defied. If anything reason was used cunningly.
- mmahemoff 6y ago
  They latched onto Citron first. They're focusing on punishing the "enemy" instead of an abstract trade idea. Motivates holding longer instead of jumping ship to cash out. At this point though, many original buyers have probably sold some/all and most current holders are in it to make a quick buck, not to stick it to the suits. They'll be happy to jump off with a 2x or 3x return if they think the house of cards is about to collapse. Hedge funds sell first and retail traders left holding the bags, complaining the system's all rigged when they should never have entered in the first place. We don't know the exact timing, but we know it will be bloody at some point.
aardvarkr 6y ago
I mean, the obvious play is to short the stock now. Advertising that they're out helps cool the temperature of the storm so they're hoping to capture some value on the way down is my guess.
flunhat 6y ago
You should consider at least editing this post given that it has a massive inaccuracy in it, i.e. that Melvin Capital bought ads to communicate not having a position in GME. That was CNBC.
- drcross 6y ago
  I'll double down for you and it will really melt you brain- they paid Ars in this article to say they have covered their shorts. To think hedge funds wouldnt do such a thing when so much is riding on this, is extremely naive.
  - fractionalhare 6y ago
    With respect, you haven't thought this through. Given there is "so much riding on this", why do you think a hedge fund would concoct a nefarious, extremely uncertain scheme to get people to think they closed instead of actually closing? You agree they're motivated by money, right? They would have lost literally all their money, even with the additional investment, if they were still in when GME soared to $400. They would also be aware of that fact.
    - bluGill 6y ago
      Because closing their position is not what any sane shorter wants to do. The bottom line of GameStop sucks baddly. Anyone who can add to their shorts stands to make a fortune in a few months after this all calms down. Though they might have seen what was happening and exited at 50 to reenter at 300. That would be incredible foresight.
      - qeternity 6y ago
        Why do you think short squeezes happen? It’s not because shorts are being insane and covering. They are literally forced to. You have buying for reasons that aren’t commercial and that’s why short squeezes are so bloody.
fractionalhare 6y ago
> Considering this is a hedge fund, I just assume they're lying because, you know, it's a fucking hedge fund. If this is your prior for approaching evidence, you're always going to catch big finance lying. But not because you're actually calibrated on evidence. And you won't be able to distinguish between actual fraud and baseless conspiracy.
- kshacker 6y ago
  Well this has been going around on the reddits today. See for yourself: https://www.youtube.com/watch?v=gMShFx5rThI https://www.youtube.com/watch?v=gMShFx5rThI > Says Cramer: What's important when you're in that hedgefund mode, is to not do anything remotely truthful, because the truth is so against your view, so its important to CREATE A NEW TRUTH to develop a fiction...the great thing about the market is it has absolutely nothing to do with the actual stocks
  - deleted 6y ago
    [deleted]
  - vmception 6y ago
    quite a bit has changed since 2006, specifically in the financial reform bill of 2010 and the jobs act of 2012 not a lot, but a bit circulating a clip from 2006 as your only insight into the hedge fund world just proves all the talking heads right about retail traders being a joke.
    - protastus 6y ago
      > quite a bit has changed since 2006, specifically in the financial reform bill of 2010 and the jobs act of 2012 > not a lot, but a bit I don't know who you could persuade with such lack of conviction...
      - vmception 6y ago
        it was mainly to satisfy pedantic financial professionals passing by but I can see how that is not reconcilable for pedantic software engineers at the same time
londons_explore 6y ago
> The general assumption on WSB is that Melvin Capital is lying If a company issues a commercial press release that turns out to be a deliberate lie, doesn't that usually result in prison time for someone? Were there ambiguities in the statement?
- AtheistOfFail 6y ago
  Fines... Which won't matter if the company's bankrupt
- pb7 6y ago
  Can you link to this press release?
m3kw9 6y ago
Given they lost 53 percent that does indicate the direction they closed a lot of it.
- kshacker 6y ago
  I am more interested to know if they closed a lot the day many brokers blocked buying shares? ... so all the buys could have gone to Melvin at a price under 200 rather than over 300.
  - m3kw9 6y ago
    You would be sure they would try to close as much as they need during that big dip
twistedpair 6y ago
Short interest numbers are published on the 15th and 31st of the month. We'll get a look to day on how the shorts have changed over the last 2 weeks.
Swannie 6y ago
If you've watched the big short, you'll understand that the challenge with a short is the timing. You have to get the timing right. For Melvin Capital, they were right, until they were not - when WSB showed up. They have eaten a loss on this. But that doesn't mean to say that someone else was not willing to buy their shorts, for a hefty discount, with a significantly longer term time frame strategy (because they don't have to borrow on margin), believing that once it becomes clear that Melvin are out, that Redditors will want out of GME, and GME will likely crash back to something close to its prior levels.

ajross 6y ago

> You don't spend money on ads saying "we no longer have a financial stake in this stock" I don't think they did. The source of this meme seems to be a Twitter ad from CNBC that was teasing an interview with a quote to that effect. That's a CNBC ad selling their show, they don't take paid ads from their guests.

Teever 6y ago
> they don't take paid ads from their guests. How do you know this?
- ajross 6y ago
  They sell journalism under the NBC brand. Is this a serious question? If CNBC was issuing paid advertisement like that it would be a much, much bigger story than a spike in a small cap retail stock.
  - elif 6y ago
    NBC has double the primetime product placement of it's next nearest competitor, fox. https://ufdc.ufl.edu/UF00101603/00001 https://ufdc.ufl.edu/UF00101603/00001
    - ajross 6y ago
      That's about fictional TV shows, not news.
      - sschueller 6y ago
        Only a small segment during the 247 news station day is actually designated as news. Everything else is news entertainment which has different regulations.
        ajross 6y ago
        I still don't see what this has to do with the point above, which is that a promoted tweet from CNBC for one of their segments is clearly not a paid advertisement by the guest in the segment.
        elif 6y ago
        You don't think it is relevant in a discussion about deceptive paid primetime television marketing, that the company in question has the highest documented rate of deceptive paid primetime marketing?
        ajross 6y ago
        OK, you're just misunderstanding. "Primetime Television" is a marketing term that refers to the traditional TV network programming scheduled between 8-10pm. This is where they put the sitcoms and dramas and reality shows. And "Product Placement" refers not to advertising per se, but paid placement of retail products (e.g. cars, sodas, whatever) into the scenes in the fiction, or to appear as prizes, etc... It doesn't refer to news programming or other journalism, you just got confused. And I'll say it again: if NBC News, or any other major news media organization, ever got caught teasing a segment because of third party payment, it would be a much, much (seriously: much) bigger story than this minor nonsense about GameStop. They simply do not do what you are alleging, period.
easton 6y ago
This is not what happened, I don't know why people keep perpetuating it. The entire source of the "Melvin Capital has closed their positions" thing is an anchor on Squawk Box on Wednesday morning saying that he just got a call from Melvin's fund manager who said that Melvin closed. There hasn't been any other comment besides that one, which is why people think it may have been less than honest. https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddit-board-melvin-capital-closed-out-of-gamestop-short-position-tuesday.html https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddi...
- fractionalhare 6y ago
  The more compelling reason to believe they didn't lie about it is because we haven't heard they went bankrupt yet. We probably would have heard that it happened by now, and they certainly would have been bankrupt if they didn't get out of GME in the $100s.
  - imtringued 6y ago
    If you are already out you don't have to tell anyone. You simply have exited the market and stopped caring.
- jerry1979 6y ago
  Also, it seems like "close my position" could mean anything. Does that phrase have any specific legal meaning? For example, if I own 1 share of GME, then that is my "position". If I buy another share of GME, then I have a new position: 2 shares of GME. I "closed" my first position, and opened a new one.

nickysielicki 6y ago

The way that WSB has latched onto Melvin as their enemy is to their detriment. It was never about killing Melvin capital, or at least, it shouldn't have been. It ought to have been about the ridiculous short interest on the stock, regardless of who was funding it. Whether or not Melvin specifically has covered their shorts is irrelevant to how the short interest as a percentage of float has changed in the past week. https://twitter.com/ihors3 https://twitter.com/ihors3 is the source to pay attention to, and he's saying (within the past hour) that collectively, the shorts have been largely covered. It's going to be bloody tomorrow. ... Either that, or magical meme energy is going to defy reason once again. Who knows.

loganfrederick 6y ago
If the stock continues going up this week, it's that the "magical meme" energy is actually the momentum traders and various celebrities who want to keep the story going by putting more money into it. Of course, they are then likely to flip their positions for a profit before they tell their followers they've sold, leaving the fans holding the bag. Just at a more extended timeframe than you'd predict.
alextheparrot 6y ago
I think that post is representative of how only the market and time will actually flesh out this story. The GME holding party entrenches further because the graph is bad (Y Axis distortion) and the GME short party says the pressure has been alleviated.
jonnyone 6y ago
>defy reason once again. Nothing I've read about this hints that reason was ever defied. If anything reason was used cunningly.
mmahemoff 6y ago
They latched onto Citron first. They're focusing on punishing the "enemy" instead of an abstract trade idea. Motivates holding longer instead of jumping ship to cash out. At this point though, many original buyers have probably sold some/all and most current holders are in it to make a quick buck, not to stick it to the suits. They'll be happy to jump off with a 2x or 3x return if they think the house of cards is about to collapse. Hedge funds sell first and retail traders left holding the bags, complaining the system's all rigged when they should never have entered in the first place. We don't know the exact timing, but we know it will be bloody at some point.

aardvarkr 6y ago

I mean, the obvious play is to short the stock now. Advertising that they're out helps cool the temperature of the storm so they're hoping to capture some value on the way down is my guess.

flunhat 6y ago

You should consider at least editing this post given that it has a massive inaccuracy in it, i.e. that Melvin Capital bought ads to communicate not having a position in GME. That was CNBC.

drcross 6y ago
I'll double down for you and it will really melt you brain- they paid Ars in this article to say they have covered their shorts. To think hedge funds wouldnt do such a thing when so much is riding on this, is extremely naive.
- fractionalhare 6y ago
  With respect, you haven't thought this through. Given there is "so much riding on this", why do you think a hedge fund would concoct a nefarious, extremely uncertain scheme to get people to think they closed instead of actually closing? You agree they're motivated by money, right? They would have lost literally all their money, even with the additional investment, if they were still in when GME soared to $400. They would also be aware of that fact.
  - bluGill 6y ago
    Because closing their position is not what any sane shorter wants to do. The bottom line of GameStop sucks baddly. Anyone who can add to their shorts stands to make a fortune in a few months after this all calms down. Though they might have seen what was happening and exited at 50 to reenter at 300. That would be incredible foresight.
    - qeternity 6y ago
      Why do you think short squeezes happen? It’s not because shorts are being insane and covering. They are literally forced to. You have buying for reasons that aren’t commercial and that’s why short squeezes are so bloody.

fractionalhare 6y ago

> Considering this is a hedge fund, I just assume they're lying because, you know, it's a fucking hedge fund. If this is your prior for approaching evidence, you're always going to catch big finance lying. But not because you're actually calibrated on evidence. And you won't be able to distinguish between actual fraud and baseless conspiracy.

kshacker 6y ago
Well this has been going around on the reddits today. See for yourself: https://www.youtube.com/watch?v=gMShFx5rThI https://www.youtube.com/watch?v=gMShFx5rThI > Says Cramer: What's important when you're in that hedgefund mode, is to not do anything remotely truthful, because the truth is so against your view, so its important to CREATE A NEW TRUTH to develop a fiction...the great thing about the market is it has absolutely nothing to do with the actual stocks
- deleted 6y ago
  [deleted]
- vmception 6y ago
  quite a bit has changed since 2006, specifically in the financial reform bill of 2010 and the jobs act of 2012 not a lot, but a bit circulating a clip from 2006 as your only insight into the hedge fund world just proves all the talking heads right about retail traders being a joke.
  - protastus 6y ago
    > quite a bit has changed since 2006, specifically in the financial reform bill of 2010 and the jobs act of 2012 > not a lot, but a bit I don't know who you could persuade with such lack of conviction...
    - vmception 6y ago
      it was mainly to satisfy pedantic financial professionals passing by but I can see how that is not reconcilable for pedantic software engineers at the same time

londons_explore 6y ago

> The general assumption on WSB is that Melvin Capital is lying If a company issues a commercial press release that turns out to be a deliberate lie, doesn't that usually result in prison time for someone? Were there ambiguities in the statement?

AtheistOfFail 6y ago
Fines... Which won't matter if the company's bankrupt
pb7 6y ago
Can you link to this press release?

m3kw9 6y ago

Given they lost 53 percent that does indicate the direction they closed a lot of it.

kshacker 6y ago
I am more interested to know if they closed a lot the day many brokers blocked buying shares? ... so all the buys could have gone to Melvin at a price under 200 rather than over 300.
- m3kw9 6y ago
  You would be sure they would try to close as much as they need during that big dip

twistedpair 6y ago

Short interest numbers are published on the 15th and 31st of the month. We'll get a look to day on how the shorts have changed over the last 2 weeks.

Swannie 6y ago

If you've watched the big short, you'll understand that the challenge with a short is the timing. You have to get the timing right. For Melvin Capital, they were right, until they were not - when WSB showed up. They have eaten a loss on this. But that doesn't mean to say that someone else was not willing to buy their shorts, for a hefty discount, with a significantly longer term time frame strategy (because they don't have to borrow on margin), believing that once it becomes clear that Melvin are out, that Redditors will want out of GME, and GME will likely crash back to something close to its prior levels.