[bluGill]

How much does Melvin have? Margin calls are about total value vs short value. If gme was only a small percentage of their shorts at the start they could be well under the 50% capital requirements to not get a margin call. Hedge funds often don't diversify, but they still know the value in it.

Though I tend to agree with those who conclude that they wouldn't risk lieing in their public statements.

[f430]

They have potentially unlimited source of funds at disposal from their parent hedge fund. They often don't shut down especially when they have better information than the public.

They can eat the cost of getting the timing wrong if it means they stand to make a killing which they are poised to do as average retail traders are simply transferring wealth to the pockets of executives and hedge fund managers while thinking they are actually socking it to the big man.

Eventually the stream comes to a stop, a large dip or people cashing out signals an end and a group of retailers who didn't know that they were being pumped are caught holding the bags.

I am now reading on r/wallstreetbets that $30,000/share makes perfect sense and it had like 24k upvotes. This is the type of insanity gripping the subreddit. Now even people who don't even use reddit are asking me how they can buy GME. This is textbook peak bubble even as we are consistently seeing red days across the board.

[fractionalhare]

Melvin does not presently have a parent hedge fund, and it never has. It received investments from two other hedge funds, but those were for non-controlling revenue share.

[f430]

https://en.wikipedia.org/wiki/Melvin_Capital

does seem like a relationship to me and if so they likely have Cohen's liquidity close by. Rarely are these groups independent, they all eat from the same bowl, a very large one at that.

I just do not believe they have thrown in the towel. Wouldn't you be drunk with lust when you realize a very rare opportunity? Timing isn't the concern here its the inevitability of the obvious in the long run. Anytime GME shoots up due to retail exuberance, the probability of bearish plays go up. There's simply no fundamentals that justifies its price.

Benjamin Graham said something about voting machines and weighing scale...

[fractionalhare]

Yes they have a relationship, it's known that Point72 has been an investor. That doesn't imply ownership or even majority stake. It's very common for funds to invest in other funds, just like it's common for large tech companies to have business development and VC arms.