Melvin Capital is closing its funds and will return the cash to its investors after bearing the brunt of losses from the soaring stock prices of heavily shorted stocks recently. Melvin lost 53% on its investments just in January, according to sources.
Melvin Capital was identified as the primary adversary of individual traders who amassed and organized on forums such as Reddit’s WallStreetBets, and coordinated buying and holding of shorted stocks like Gamestop and AMC.
While we are focusing on the effect of a single manipulation of a single commodity here, investors will always have to keep an ear to the ground to identify the sudden organization and movement of masses of individual investors today. In this connected age, one investor identifying a single opportunity and publicizing it can vastly affect whatever market they operate in.