- Melvin Capital and Citron Research - notorious for their short positions in
GameStop - have closed their bearish bets after the stock's climb fueled massive losses. - Melvin Capital closed its position on Tuesday afternoon, CNBC reported.
- The Citron managing partner Andrew Left said in a video that most of his firm's position was covered at "a loss of 100%."
- Watch GameStop trade live here.
After weeks of unrelenting gains for GameStop shares,
Melvin Capital and Citron Research closed their short positions on
The Citron managing partner Andrew Left said in a video on Wednesday that most of the firm's position was covered when GameStop traded at about $90 at "a loss of 100%." He added that he maintained a smaller position in the stock.
"We'll become more judicious when it comes to shorting stocks," Left said. "Doesn't mean the industry is dead, but it just means you have to be more specific."
GameStop shares have surged by more than 700% in January as a horde of retail investors bid up shares and cheered each other on in Reddit forums like
While other Reddit-fueled rallies died off in a matter of days, GameStop's climb has gained momentum. The stock leaped on Tuesday after the billionaire investor Chamath Palihapitiya tweeted that he had bought call options on the stock with a February 19 expiration date.
Shares skyrocketed again when, minutes after
GameStop's new crowd of bulls got their first taste of blood on Monday when The Wall Street Journal reported that Melvin Capital would receive a $2.75 billion investment from Citadel and Point72 Asset Management, expected to buoy the short-seller after its loss of nearly 30% through Friday. While the firm had bet against several other stocks, its GameStop short is believed to have driven the bulk of the losses.
More broadly, GameStop short-sellers have lost more than $5 billion in the year to date, according to data from the financial-analytics firm S3 Partners. Back-to-back rallies have pushed out older shorts, but demand to bet against the stock remains "extremely strong," Ihor Dusaniwsky of S3 said.
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