Hedge funds lose $6 billion more betting against meme stocks - FT

AMC movie theaters
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  • Hedge funds Melvin Capital and Light Street Capital have suffered steep losses since the start of May as stocks favored by Reddit's (REDDIT) WallStreetBets crowd rallied again.
  • Short positions on GameStop (NYSE:GME) -26%, AMC (NYSE:AMC) -13%, Bed Bath & Beyond (NASDAQ:BBBY) -10%, BlackBerry (NYSE:BB) -7% and Clover Health (NASDAQ:CLOV) -17% have resulted in losses of $6B in a little more than a month, the FT reports, citing data from Ortex Analytics.
  • Gabe Plotkin's Melvin and Glen Kacher's Light Street were also hard hit in the January squeezes.
  • Plotkin testified before Congress in an investigation of the moves that pitted retail investors against Wall Street.
  • Melvin lost another 4% in May, bringing its losses to 44.7% for the year, the FT says.
  • Ortex co-founder Peter Hillerberg told the paper that while funds have recently reduced short positions, short interest is still "at very high levels."
  • The meme trade has broadened this time around and shares have shown more resilience staying at higher levels. But most of the stocks are sliding today.
  • Reddit founder Alexis Ohanian says that Wall Street has "crossed the Rubicon" on meme stocks.

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