Photo = AP
The number of funds that suffered huge losses due to the surge in the’GameStop’ stock price hit the Wall Street hedge fund industry in an emergency. They are intensively monitoring the stocks that appear on the online bulletin boards of ant investors.
According to the Financial Times on the 29th (local time), data analysis company Quiberquant analyzed the Reddit’s’Wall Streetbets’ bulletin board, which is crowded with millions (7.3 million as of the 31st), to find the most mentioned stocks and perform language processing. Through this, it is trying to determine whether the feelings for these stocks are positive or negative. “A lot of institutional investors are requesting real-time data on the discussions on the Reddit Forum,” said James Cadetsk, CEO of Quiver. “They are hedge funds facing’short squeeze’ due to the surge in game stop stock prices such as Melvin Capital. I’m embarrassed when I hear them.
Gamestop’s stock price surged 400% last week and 1600% this year. As a result, Melvin Capital, which sold many shares short, lost 53% of its assets ($12.5 billion) last month. This is because the stock price of short-sold stocks soared, so they had to buy back and pay back at a high price. It is known that not only Melvin Capital, but also Citadel, Point 72, Viking, and Maplelane suffered significant losses.
In an interview with FT, the head of one of the world’s largest hedge funds, “We plan to monitor related bulletins such as Reddit to avoid unexpected losses. Reddit-related risk management is our top priority.” “Social media platforms are playing a more central role in the financial market,” said David Rebkowitz, a strategist at JPMorgan. “Therefore, information sources that were traditionally insignificant are drawing attention.”
FT pointed out that hedge funds in the past focused on searching hidden corners of corporate financial statements to find what to invest in, but now they are turning to online bulletins to get ahead of individual investors.
Reporter Kim Hyun-seok [email protected]
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