Hacker News Reader

Comment by fractionalhare | Hacker News Reader

> From what I understand Melvin Capital, one of the biggest short-sellers that got in trouble, is owned by Citadel

No, Citadel does not own Melvin Capital. Melvin Capital received an investment from Citadel (the hedge fund, not the market maker) and Point72 this week.

> Robinhood seems to be manipulating the market to make it easier for Melvin Capital to cut their substantial losses.

Melvin already cut its losses this week, as was widely reported. There is no evidence for the counter claims that they're lying, which themselves originate on reddit. In particular: all the widely cited short interest figures on reddit which purport to show this are out of date (usually by weeks), and even if they were true, they would not be proof the short positions weren't closed.

View on HN

So Melvin Capital got a few billion from Citadel after the reddit short squeeze started? And we're not supposed to think anything about that is shady?

And there is no proof Melvin cut their losses. There is no way to know for sure. The shorts are still there, whether they're Melvin or anyone else.

I didn't say anything about what you're supposed to think. You can definitely believe it's shady.

As for the proof about cutting losses - no, there's no proof. You can question every single fact you read about this story in the media if you want. The reasons most people have given for why they would lie about it instead of just do it kind of strain credulity for me. There are a lot of conspiracies being spread around with much regard for whether or not they are true instead of whether they could be true.

Logic says they are lying or trying to leave an impression as if they cut their losses, since if they truly already cut their losses why were they so adamant about telling their story and trying to get people out of the market. If they cut their losses they would have no incentive to tell people about it, they would just not comment and go on to new ventures.

> Melvin already cut its losses this week, as was widely reported.

This was widely reported, and Melvin might not be the big bag holder anymore, but the short interest hasn't subsided. It's actually grown.

The squeeze never happened. The squeeze never happened.

https://www.zerohedge.com/markets/we-have-some-bad-news-game...

The article above written by renowned financial journalist... Tyler Durden?

So just partially owns, then.

In the sense that any Limited Partner partially owns an investment vehicle because they have a stake in it, yes.

Melvin founder was protege of Point72's SAC

The same way public retirement funds in Wisconsin "partially own" Apple.

Do public retirement funds in Wisconsin own >30% of APPL?

As was reported, the capital raise Melvin received wasn't 30% of their total AUM even after the GME losses. And even if it were, it was also reported that Citadel and Point72 received non-controlling revenue share.

I'm having trouble finding specific numbers, do you have a source?

As far as I can tell they started the year with ~12.5B AUM, and have lost ~30% on the year and received a 2.75B cash infusion from Citadel et al, which I assume was at a discount given their position. So my rough estimate is around ~25-35%, given the uncertainty around those numbers.

Alternatively, did Wisconsin public retirement funds make an enormous investment in AAPL right when it was about to become insolvent and had no other real options for raising money? That is, you can assume anyone investing in that circumstance (like Citadel into Melvin) would demand a huge stake in return.

Reply on news.ycombinator.com