The harsh effect of the halting of stock trading last week seems to be affecting all that was involved, as several stockbrokers and firms, asides from the retail traders, have continued to complain about the incident.
The Reddit users’ comments, which took stocks into a nosedive, have also been condemned by all, with several public figures expecting reactions from the government regulators. Melvin Capital, a U.S based investment firm, is now the latest player in the game affected by the situation. It has reported a loss of more than 50%, amounting to about $4 billion.
Melvin Capital is not alone in recording losses
The New York capital investment firm, established in 2014 by business economist Gabriel Plotkin is one known to have conducted its business diligently. Earlier in January, the capital firm had received about $3 billion worth of investment from American Billionaire Steve Cohen’s Point72 and Citadel investment group, as investments into its shares.
The hedge fund, whose assets valuation was slightly above $12 billion at the start of the year, has now reported that it currently valued slightly below $8 billion, amidst a 53% loss blamed largely on the short-selling of Gamestop stocks. The insiders who aided the public about the information of the losses feel like there will be a need for the hedge fund managers to restructure their investment portfolios to allow the free exit of trade securities.
Citron Capital, a venture capital firm with an investment ranging from technology to communications, has also reportedly suffered the same fate as Melvin Capital after it reported the loss of capital due to the halt of GameStop shares’ stock trading. However, despite it announcing that it had made losses, the public is currently unaware of the extent of the losses incurred.
Robinhood and Co continue to face public outrage
The public continues to pour out their outrage towards Robinhood and a few other stock trading firms who broke the heart of retail traders by restricting GameStop shares’ trading while it was surging. The impact of these stock players’ decisions has been weighed upon by all involved, as many believed it is unethical and unlawful, despite financial regulatory bodies backing them up.
The U.S. Securities and Exchange Commission had previously announced last week that it is currently evaluating the situation. The public should rest assured that the perpetrators of any vices related to the incident will be brought to justice.
Several crypto analysts weighed in upon the situation who believe that the retail traders should, in retaliation, turn their back against Robinhood and Co. by investing their stocks in cryptocurrency. However, despite the turmoil, Gamestop stocks are still rising and currently trades at $325 today. Unfortunately for Robinhood, they are still facing at least two different lawsuits for their impact in halting stock trading.