[whimsicalism]

Citadel securities does not "play games", they aren't YOLO-ing on a GME short. They are happy to model the market so they can hedge better than their competitors and make money off of the bid-ask spread.

Melvin Capital has already stated they have closed out their position, think it would probably be fraud if they hadn't.

[TuringNYC]

>> Melvin Capital has already stated they have closed out their position, think it would probably be fraud if they hadn't.

IANAL but I doubt this would be fraud -- they arent a public corporation making statements about themselves. They did have LPs, but i'm not sure what restrictions there are around speaking -- would anyone know?

[cmdli]

IANAL also, but I would imagine that they would need to represent themselves accurately to their investors at the very least. Perhaps they could be telling their investors something different privately?

[TuringNYC]

Yes, hedge funds send their LPs private "Investor Letters" with a lot more detail. Not sure who the public statement was meant for, but it might have been meant to discourage the public from taking opposing positions.

You wouldnt communicate to your LPs via CNBC or Twitter.

[cryptonym]

You may work on some fancy model but at the end of the day you are taking a risk and there is a possibility to lose in the worst possible way. Call it games, YOLO or hedge better than competitors.

Maybe, the problem was just transferred to someone else so they can remove it from their statements. And now that someone is trying to deal with this. Unless we have trustable source with all the details on how that position has been closed, I don't think it's safe to assume anything.

[whimsicalism]

> you are taking a risk and there is a possibility to lose in the worst possible way. Call it games, YOLO or hedge better than competitors.

Sure, there is some risk in liquidity provisioning, but I think you are really not understanding what market makers do and conflating it with hedge funds.

[npsimons]

> Melvin Capital has already stated they have closed out their position, think it would probably be fraud if they hadn't.

Two points:

  1. As I understood it, they closed *A* position, not their whole position, and announced that in the hopes it would deflate the stock price so Melvin doesn't crater.
  2. And what, exactly, would be the punishment for this fraud, assuming they even get prosecuted and convicted? Can you put a dollar figure on it? Now put a dollar figure on how much they would lose if they didn't make that announcement, and compare the two numbers.

[Red_Leaves_Flyy]

Iirc they only stated that they closed "a" position. Others have run with that in a horrid game of telephone.

[whimsicalism]

"Melvin Capital has repositioned our portfolio over the past few days. We have closed out our position in GME (GameStop)"

You recall incorrectly. I encourage you to Google before commenting your recollections, it's quite easy to find.

[exclusiv]

Which "spokesman" made that statement? Pretty easy to deny no?

"Melvin Capital has repositioned our portfolio over the past few days. We have closed out our position in GME (GameStop)," the spokesman said in a statement. [1]

[1] https://www.usnews.com/news/top-news/articles/2021-01-27/hed...

[llampx]

They have every incentive to lie

[Red_Leaves_Flyy]

Where's your source?

[whimsicalism]

Literally just google the sentence I posted, it's been reproduced on a number of reputable outlets.

[shrimpx]

Have they closed out their position? They said via CNBC that they have "closed a position", that's basically the quote that's making the rounds.

[baq]

remember they don't have to report if they opened another one.

[whimsicalism]

If they opened another one, it would be at the much higher price and thus fine.

[baq]

couple hours after sister company of their major stakeholder (as of monday) disables purchases of the same stock for retail.

this stinks.