A federal judge dismissed a multi-district lawsuit this week that was filed against the online trading platform Robinhood for restricting trades of certain stocks in the midst of the “meme st…
ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
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Melvin Capital Management made Wall Street history in January 2021 when its massive bet against GameStop and several other 'meme stocks' (although that sobriquet had yet to be coined) blew up in its face, saddling the fund with nearly $7 billion in losses. Its LPs were extremely miffed, and fund manager Gabe Plotkin later claimed to have been bombarded with mean-spirited messages (including threats) from strangers angry about his firm's wager.
But somehow, Plotkin's sudden turn in the limelight ended in salvation: his mentor Steve Cohen put up hundreds of millions of dollars to save Melvin from insolvency. And Citadel's hedge fund business pumped in another $2 billion, giving Plotkin a chance to try and win back his losses. Unfortunately, this is proving much more difficult than Plotkin and the firm - which still has $12.5 billion AUM - had expected.
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Per a WSJ report published Friday, Melvin is now down 17% YTD as its positions have gotten caught up in the brutal market rout that has placed small caps in bear market territory and the S&P 500 not far behind.
The 17% loss comes on top of a 39.3% drop last year. Melvin managed to erase a portion of its meme stock losses, but not nearly enough to cover even half of those losses. And now, for the second year in a row, the firm is about to post a double-digit (percentage-wise) loss in January for the second year in a row.
Given where the money has come from (printing) and who it went to (central banks) there urgently needs to be some kind of global reconciliation process. A lot of the post 2008 debt could be wiped out with very few negative impacts.
I'd imagine Facebook (the product, as opposed to Meta) are losing users but WhatsApp seems to have users locked in, also people still love Insta. Be interesting to see what they do but I think they realized Facebook was a dying star for a while now.
It's a bit nuts isn't it? I think I saw that Facebook's PE ratio is about 15 or something now, which is pretty low and more something you'd see for an old legacy business in a low-growth industry.
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